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The first institution of its kind in Europe, KredEx, located in Estonia, offers low-interest loans for the renovation of apartment houses. Using EU structural funds and several other funding sources to make a revolving fund, KredEx provides credit institutions with financial resources that they can then lend to housing associations for lower interest and longer loan periods than typical market loans. A key component of this renovation work is its link to energy savings. The case study looks at the operations of the housing renovation loan scheme in one city – Tartu.

Executive summary

KredEx provides low-interest loans for the renovation of apartment houses using EU structural funds. In 2009 Kredex formed a revolving fund combining several funding sources (ERDF, CEB, KredEx), which allowed it to provide local credit institutions with funds that they could then lend to other bodies with lower interest and longer loan period than typical market loans. The recipients of these funds are cooperative housing associations (for housing built before 1993) and municipalities (as owners of social housing).

A key component of this scheme is its energy-saving objective. One of the requirements for renovation is an energy audit which is carried out on each apartment house before undertaking the renovation. The average energy savings after renovation is calculated to be around 40% (and can be as much as 50%). For many flat owners this means that after they take out their loan, their monthly utilities bill shows no increase. The loan payment is thus fully covered by the saving in heating costs.

The loans are provided with interest subsidies. The interest subsidies are supplemented by refurbishment grants to housing associations, and are used to cover self-financing requirements. The scheme on offer is thus a complex financial instrument, the benefits of which are harder for ordinary citizens to grasp than simple grants. Its success therefore requires an all-round approach including various activities aimed at making people aware of the benefits of renovation, and encouraging and facilitating borrowing. Such activities include awareness campaigns, training, and showing model houses. KredEx's innovative approach has resulted in housing associations in Estonia successfully carrying out a considerable amount of modernisation on their housing. This is an innovative solution that is much more effective than the previously existing national grant scheme.

Download the case studyDownload the analytical fiche

Technical information


Rejuvenating an ageing city

Member State and Region

Estonia, Tartu

Duration of project

55 months (05.2009 – 12.2013)


Total budget: 48 900 000 € - ERDF contribution: 17 000 000 €

Cohesion Policy Objective


Managing Authority

Ministry of Finance (1st level intermediate body: Ministry of Economic Affairs and Communication)

CCI nr of OP

2007EE161PO002 OP ‘Living Environment’


Mrs Mirja Adler - Head of Housing and Energy Efficiency Division in KredEx - 10151 Tallinn - Estonia

Tel: +372 667 4128

Mail: This email address is being protected from spambots. You need JavaScript enabled to view it.


http://www.kredex.ee/renovation-loan-for-apartment-buildings (EST, RU, EN)


energy efficiency, innovation financial engineering