Reconstruction grant 2020
The comprehensive reconstruction of an apartment building makes it possible to increase the energy efficiency of the building, extends its useful life, raises its value on the real estate market, and provides an improved internal climate. This grant is geared towards apartment associations and local governments that are looking to reconstruct their apartment building as comprehensively as possible.
The grant is round-based and applications are approved within the volume of the funds allocated to the region.
According to Eurostat's territorial statistical accounting (NUTS 3), Estonia is divided into regions as follows:
- Northern-Estonia (Harju County)
- Western-Estonia (Hiiu, Lääne, Pärnu and Saare counties)
- Central-Estonia (Järva, Lääne-Viru and Rapla counties)
- North-East (Ida-Viru County)
- Southern-Estonia (Jõgeva, Põlva, Tartu, Valga, Viljandi and Võru counties).
The purpose of the changes is to ensure the more uniform regional distribution of grants and to provide a more level playing field when it comes to applying for the grant.
- Energy savings
- Healthy indoor climate
- Good-as-new dwelling
- The grant is intended for the renovation of apartment buildings constructed before 1993, in which an apartment association has been set up or which are wholly owned by the local authority.
- The grant amounts to 30% of the total cost of the renovation works in Tallinn and Tartu, and to 40% of the total cost of the renovation works in rural municipalities neighbouring Tallinn and Tartu, where the market value of the property in the year preceding the submission of the application was higher than 500 €/m2 according to the transaction database of the Land Board, as well as in Elva, Haapsalu, Keila, Kohila, Kuressaare, Maardu, Otepää, Paikuse, Pärnu, Rakvere, Rapla, Sauga, Uuemõisa and Viljandi. In the rest of Estonia, the grant amounts to 50% of the total cost of the renovation works.
- In regions other than Tallinn and Tartu, it is possible to apply for a grant that is 10% lower than the official percentage if all the required conditions are not met, for example, if no heat-recovery ventilation system will be built or if the linear thermal bridge requirement will not be met.
- Any previous works need not be redone, provided that the desired energy performance class can be achieved with other works.
- It is only possible to apply for the grant for the renovation works set out in the proper final design documentation.
- An applicant has to enter into an agreement with a technical consultant or a company through which the technical consultant provides the service, unless the applicant has received no bids for reasons beyond the applicant’s control. The agreement between a technical consultant and an apartment association should be signed by the moment of submission of the application at the latest.
- The building design documentation submitted when applying for the grant will undergo an expert assessment organised and paid for by KredEx.
- After KredEx’ expert assessment, bidding for the renovation works will be organised through the Public Procurement Register.
Application and disbursement
- The following persons can apply for the grant:
- the authorised representative of an apartment association;
- the rural municipality or city, if the apartment building is owned by the local authority in its entirety.
- Applications geared towards business objectives will be rejected. At least 80% of the apartment ownerships in an apartment building must be owned by the local authority or by at least 5 different natural persons.
- If there are up to 5 apartment ownerships in an apartment building, each apartment ownership must have a unique owner or at least one apartment ownership must belong to the local authority.
- If the apartment building is owned by the local authority in its entirety, all the dwellings must constitute the local authority’s social or municipal housing.
The following costs related to the renovation of an apartment building are eligible for support:
- reconstruction and insulation of the facade, and related works;
- reconstruction of open and closed balconies, installation of glass or replacement of balconies, and related works;
- reconstruction and insulation of the roof and the roofing deck, and related works;
- replacement or renovation of windows, exterior and fire doors, and related works;
- reconstruction and insulation of the basement, and related works;
- replacement, reconstruction and balancing of the heating system, preparation of the heating system balancing protocol, and related works;
- installation, replacement or reconstruction of the water supply and sewerage system, and related works;
- construction of a heat-recovery ventilation system or reconstruction of the ventilation system, preparation of the ventilation system measurement protocol, and related works;
- acquisition and installation of equipment necessary for using local renewable energy;
- partial or complete reconstruction of the control system and operating mechanism of the lift, or replacement of the lift, and related works;
- replacement or reconstruction of the building’s electrical system in common areas, and related works;
- installation of the insulation of the windows of common areas and apartments and restoration of the interior finish after the construction of the heating and ventilation systems;
- installation of ramps and handrails on staircases necessary for entering and exiting the building, construction of the lift, and related works;
- preparation of the building design documentation and carrying out the site investigation and building audit underlying the building design documentation;
- use of the services of the technical consultant for the renovation of the apartment building;
- exercise of owner supervision.
Renovation works must not be commenced before the financing decision is made.
From 1 January 2014, costs arising from the agreement signed with the technical consultant and costs of preparation of the building design documentation for the renovation works (preliminary, final and as-built design documentation) are eligible for support. If, under the agreement signed with the technical consultant, the technical consultant also exercises owner supervision, the costs of exercising owner supervision incurred before the date of submission of the application to the implementing body are not eligible.
The costs of owner supervision are eligible for support if the owner supervision is exercised by a competent person provided for in section 23 of the Building Code.
The costs related to the technical consultant are eligible for support only if the consultant has been selected from the list provided on KredEx’ website and has been contracted at the time of submission of the application at the latest.
The following activities are not eligible for support:
- electrical works and works on the weak current system not related to common areas or to renovation works (e.g. electrical works within an apartment);
- connection to the distribution network of a renewable energy production plant (electricity, district heating, gas), incl. the acquisition and installation of the equipment necessary for the connection (e.g. a new meter, connection board);
- construction of the property’s fences and parking lots;
- any other construction works which have not been specified as eligible works and which are not related to the improvement of the indoor climate of the apartment building, to the reconstruction of enclosing structures or heating systems or to the installation of equipment necessary for using renewable energy and which do not ensure the achievement of the energy performance class required for receiving the grant;
- if the beneficiary wishes to alter the final design documentation of the renovation works during the renovation process, the beneficiary is obliged to submit to the implementing body an expert assessment which certifies the conformity of the modified building design documentation and the energy calculation performed on the basis thereof to the scope and quality of the renovation works and the energy performance required for receiving the grant;
- costs of building an additional floor, an attic or basement floor, and preparatory works relating to these activities.
- The application must be submitted digitally, having been signed by the person authorised to represent the applicant (manager of the apartment association);
- an energy performance certificate based on the measured energy consumption of the apartment building (according to the requirements presented here), prepared from 03 May 2013;
- the basic project and the energy calculation certifying the energy efficiency in a format approved by the final beneficiary or a simulated calculation;
- the notification of an economic activity or confirmation from the undertaking which prepared the main project, pursuant to § 25 of the Building Code, regarding the legal relationship between the undertaking and a competent person acting in the interests of the undertaking;
- in the case of an applicant that is an apartment association the minutes of a decision of the general meeting in which the decision on the performance of the reconstruction works has been fixed; a description of the reconstruction works and the accompanying services; if necessary, the decision to take out a renovation loan in order to implement the project, and the maximum possible amount of the loan;
- in the case of an applicant that is a local authority, an act, in which the decision on the performance of the reconstruction works has been fixed; a description of the reconstruction works and the accompanying services; if necessary, the decision to take out a renovation loan in order to implement the project, and the maximum possible amount of the loan;
- price offers taken when ordering the services of a technical consultant together with the invitation to tender and the contract for the provision of the services of a technical consultant concluded with the successful tenderer;
- in the case of an applicant that is an apartment association, a list of the members of the apartment association, which is no more than 30 calendar days earlier than the date the application was submitted to the final beneficiary;
- where applicable, the price offers taken for the site investigations and the audit of the construction work, together with the invitation to tender and the contract concluded with the successful tenderer;
- the price offers taken when ordering design work, along with the invitation to tender and the contract concluded with the successful tenderer.
- In order to commission renovation works, a beneficiary has to conduct an electronic procurement procedure in the Public Procurement Register. Procurement is subject to the general principles of public procurement provided for in section 3 of the Public Procurement Act and the relevant guidance material (link).
- In order to commission design work, the site investigation, the building audit, the services of a technical consultant, owner supervision services and utility system maintenance services, bids have to be requested from at least three independent suppliers. An invitation to submit a bid has to set out the criteria for the selection of the successful bid. Bids must be transparent, comparable and verifiable.
- All bids requested for services, goods or construction works and submitted to KredEx have to be signed by the bidders.
- The invitation to submit a bid has to be issued, the bids have to be submitted and information related to the bidding process has to be exchanged electronically. All invitations to submit bids for services or goods issued to suppliers have to be submitted to KredEx. The invitation to submit a bid sent to a supplier by the beneficiary or the technical consultant providing services to the beneficiary has to clearly set out the time when the invitation is sent, the goods or services for which a bid is requested, the person to whom the invitation is sent and the person sending the invitation. An e-mail containing the invitation to submit a bid has to include all the relevant documents submitted to the bidder as attachments.
- The selected bid has to be based on the best value for money.
- If the volume of works changes in the course of implementation of the project, the alterations have to be specified in a written statement, setting out the reasons for the alterations and other relevant circumstances.
Please note that bids have to be requested from companies active in the fields in which the applicant needs services.
The above requirements of an assistive nature are without prejudice to the requirements for bids provided for in the Regulation on the Support for Renovation of Apartment Buildings.
List of technical consultants (updated on a continuous basis)
The technical consultant will advise the beneficiary on the budgeting of design and construction works, procurement of design and construction works, preparation of time schedules and carrying out other necessary processes. The main task of the technical consultant is to advise the apartment association on technical issues, in particular before the start of the renovation works, but also in the later stages of the renovation process. The content and scope of the services commissioned from the consultant is a matter for the apartment association to decide.
1) A natural person who has undergone competence training in the renovation of apartment buildings on the basis of a training module approved by the Ministry of Economic Affairs and Communications and passed an examination after the training may act as a technical consultant.
2) The technical consultant provides services on the basis of a written agreement between the applicant and the technical consultant or between the applicant and the company through which the technical consultant provides services. A sole proprietor may also act as the technical consultant.
3) The technical consultant must provide an independent service. He or she may not have any economic interest in the companies from which bids for design or reconstruction work are requested and which will carry out such work, or from which bids for exercising owner supervision are requested, except where the technical consultant is acting as the person specified in section 21 (1) 1) of the Building Code for the company exercising owner supervision. The technical consultant may not be a member of a management body of the legal person acting as the administrator of the apartment association, be in a contractual relationship with the legal person acting as the administrator of the apartment association, or be appointed by the administrator of the apartment association as the building manager for the apartment association applying for the grant.
4) The applicant has to select a technical consultant from the list published on the website of KredEx.
5) The technical consultant will perform all or some of the following tasks, depending on the agreement between the beneficiary and the consultant:
- preparations for the commissioning of the building design documentation (at least at the stage of the final design documentation) and conduct of the procurement procedure for the design work. For compiling the terms of reference of the building design documentation, this example of the terms of reference and contracting volume can be used, if desired;
- advising on the entry into a contract with the entity compiling the building design documentation;
- coordination of design work and expert assessment;
- preparation and conduct of the procurement procedure for construction works, and related advisory services;
- advising on the entry into a contract with the building contractor;
- advising on the preparation of the documentation necessary for application for the grant;
- coordination of renovation works;
- verification of the compliance of the statements and invoices submitted by renovation contractors with the concluded contracts and with the degree of completion and agreed volumes of works;
- exercising owner supervision, subject to the existence of the required qualifications;
- organising inspections during the warranty period and advising on the acceptance of warranty works.
A model agreement with a technical consultant is available here. It is not a mandatory format and the parties can alter it or make only partial use of it.
KredEx will disburse the grant or make the last payment of the grant on the basis of a statement confirming the completion of the renovation works, provided that the implementation of the project activities is demonstrated.
The grant will be disbursed on the basis of the payment request based on the actual costs. Costs must be proved by invoices, statements of acceptance of works, and contracts.
The beneficiary may apply for the disbursement of the grant in two instalments. The beneficiary has the right to submit the first payment request for a partial payment when at least 80% of the total volume of the renovation works has been accepted. Note that the second payment, i.e. the final payment of the grant, may not account for less than 15% per cent of the total volume of the renovation works. The first partial payment will be made in accordance with the invoices and statements of acceptance of the works performed, and the second payment will be made after the completion and acceptance of all project activities and the submission of the payment request.
The grant will be disbursed in accordance with the percentage of eligible costs specified in the decision approving the application and up to the amount indicated in the decision. If the cost of the renovation works turns out to be lower than the amount of the grant indicated in the application, the grant will be disbursed on the basis of the actual cost of the project and in accordance with the percentage of the grant indicated in the decision approving the application.
To receive a disbursement, the applicant has to submit the following by e-mail:
- a payment request on the appropriate form (completed request in PDF format. Attention! Please use Acrobat Reader to complete the request form. The form cannot be completed using the Windows 10 Edge browser. Please save the PDF first on your computer and then complete it using Acrobat Reader);
- construction contracts or contracts for services;
- statements of delivery and acceptance of works;
- payment orders or account statement;
- a protocol on the measurement of ventilation system air flows performed in accordance with a generally accepted methodology;
- a heating system balancing protocol, which must also be submitted if the central heating system was previously reconstructed and it was not renovated in the course of the works performed with the renovation grant;
- a gas installation audit if there is a gas appliance in an apartment;
- photos of the renovated apartment building and utility systems;
- a general ledger statement indicating the distinction between eligible costs of the project and other costs.
The beneficiary is obliged to submit the energy performance certificate based on the data on energy consumption measured in the second calendar year after the completion of the project, no later than one month after the end of the relevant calendar year in the manner required by the implementing body. For example, if the construction work is completed in December 2020, the energy performance certificate must be drawn up on the basis of the data of 2022 and submitted to KredEx by the end of January 2023 at the latest.