Background information

On 6 October 2020, the State Aid Fund for Business (the Fund) was established in Lithuania at the initiative of the Bank of Lithuania (BL). The main objective of the Fund is to provide aid to large and medium-sized enterprises that face financial difficulties and to help ensure the sustainable performance of large and medium-sized companies and the vitality of the capital market. This measure helps the companies to ensure their liquidity and to recover faster from the COVID-19 crisis. The Fund invests in Lithuanian companies that are experiencing financial difficulties that pose a risk to the continuity of their operations.

Content of measure

The Fund provides aid to large and medium-sized businesses affected by the COVID-19 pandemic through loans and by investing in their debt securities, shares and hybrid instruments. Financial assistance is provided to companies that are unable to obtain the funding they need on the financial markets and thus face serious difficulties in continuing their activities. When providing support, the priority is given to companies that create innovations.

The main means of support offered by the Fund:

• Loans for large and medium-sized businesses. Maximum term – six years. Amount – from €300,000 to €2,000,000.
• Debt securities. Maximum term – six years. Amount – €1,000,000 or more.
• Equity and hybrid instruments. Maximum term – six years. The amount allocated for recapitalisation may not exceed the difference observed in the company’s capital structure between 31 December 2019 and the date of the decision to invest the Fund’s resources.

For any one company, loans and bonds may not exceed 25% of its 2019 turnover. Exceptions may be made and more financial aid provided for those companies most heavily affected by COVID-19. Interest rates are set considering the term of the investment, the lending risk and collateral quality, and other criteria.

The Lithuanian state, represented by the Ministry of Finance (MF), is the sole shareholder of the Fund. The State Investment Management Agency (VIVA) is responsible for managing the Fund.

Use of measure

According to the data provided by the VIVA, by 11 January 2022, the Fund has provided support of €157 million to 28 companies in the form of loans or investments in bonds. The support was mainly provided to hotels and manufacturing companies. According to the Manager of VIVA, the Fund plans to sign another €100 million in loan contracts by the beginning of summer 2022

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Larger corporations	Does not apply to citizens

Actors and funding

Actors	Funding
National government Public support service providers	National funds Other

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Unknown	Unknown
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Unknown

Involvement

No information available.

Views and reactions

Representatives of the employers‘ organisations positively assessed the establishment of such a fund in Lithuania. According to the President of the Lithuanian Confederation of Industrialists (LCI), such a fund is very important and timely for Lithuania, as one can observe a consistent decrease in production volumes in the country since the start of the COVID-19 pandemic.

Sources

• 06 October 2020: About the Fund (viva.lt)
• 06 October 2020: Vidmantas Janulevičius on the the State Aid Fund for Business: I would not like the structure of the Fund to change (www.lrt.lt)
• 11 January 2022: D. Vilčinskas: The State Aid Fund for Business will soon have a strategic partner (www.15min.lt)