Rūdninkų military town contracts delayed due to financing negotiations

The contracts for the second phase of the Rūdninkų military town, intended for German troops, will come into force later than planned due to ongoing financing negotiations, reports LRT, citing BNS and the Lithuanian Ministry of National Defence (KAM).

The agreements, signed in January, were expected to take effect by mid-June, with construction firms Merko statyba and Rudina required to finalise terms within 150 days. However, discussions with banks—including the European Investment Bank (EIB)—are still incomplete, delaying the process.

The ministry noted that the EIB’s involvement in financing a large-scale defence infrastructure project in Lithuania for the first time has added complexity, extending the preparation and coordination of financial documents. Companies have been granted 45 days to complete the necessary steps, with the ministry urging swift action.

Merko statyba, responsible for two sections of the project, expects to finalise financing agreements by the end of June. The company stated that active construction work could begin once contracts are in force. Similarly, Rudina, backed by Invalda INVL, anticipates signing bank agreements by the end of the month, with the possibility of an earlier completion.

The EIB is providing a €540 million soft loan for the project, which has encouraged Lithuanian commercial banks to offer more competitive financing terms. Under 15-year public-private partnership agreements, Rudina will receive €487.61 million (including VAT) for its section, while Merko statyba will receive €393.25 million and €453.5 million for its two parts. Payments will commence upon completion of construction.

The project is divided into three parts to reduce state risks and is being developed under a public-private partnership model.