The European Bank for Reconstruction and Development (EBRD) is supporting the first special opportunities-focused real estate fund in the Baltic region that will back energy efficient projects.
EBRD will provide an up to €20 million equity commitment to Usaldusfond EfTEN Special Opportunities Fund (EfTEN SOF) that is managed by EfTEN Capital, the biggest real estate fund manager in the Baltic States.
The is the bank’s second investment in a real estate fund managed by EfTEN Capital, following a commitment of €30 million during 2019.
EfTEN SOF was launched in January 2024 to invest in across all real estate asset classes, including residential, across Estonia, Latvia and Lithuania.
The fund aims to reach very high energy efficiency in its projects, at least 10% better than national nZEB standards.
“Our investment will not only support greater energy efficiency across the real estate sector in the Baltic States but will also contribute to the strengthening of the private equity sector regionally – two of the EBRD’s priorities in the Baltic region,” says Tomas Kairys, EBRD Head of Baltic States.
The fund will provide financing through both equity and debt capital, added Viljar Arakas, CEO of EfTEN Capital.
“The fund aims to fulfill the gap that has been created from the tightened banking sector financing conditions and decreased interest of foreign investors towards the Baltic property sector. The fund’s preferred cases are the ones where together with joint control of existing owners we can successfully take real estate projects to the successful exits. We expect to exit the projects in a 3–4-year horizon,” added Arakas.
To date, EBRD has invested nearly €1.2 billion through 117 projects in Estonia, more than €1 billion through 112 projects in Latvia, and almost €1.6 billion through 131 projects in Lithuania.
