Czech city Ústí nad Labem to get green upgrades with EIB loan of almost €43 million

This article is published in association with European Investment Bank.

• EIB lends €42.8 million to Ústí nad Labem in north-west Czechia to upgrade municipal infrastructure.
• Loan to cover building, transport and energy renovations.
• Improvements also planned for education and social care.

The European Investment Bank (EIB) is lending €43 million (CZK 1.08 billion) to the Czech city of Ústí nad Labem for a range of green and social improvements, highlighting a Europe-wide push for urban renewal and sustainability.

Ústí nad Labem, with a population of around 90 000 located near the Czech border with Germany, will use the EIB loan to refurbish buildings, enhance energy efficiency, develop clean power and upgrade services, including public transport, education and social care.

The city is an industrial centre where a number of Czech manufacturing companies are located. It has a port on the river Elbe and serves as a major road and railway hub. The European Union seeks to make all cities climate-neutral by 2050 to combat global warming.

“This loan to Ústí nad Labem underscores our commitment to empowering cities in their transition towards climate-neutral and sustainable growth. By modernising infrastructure, improving energy efficiency and advancing renewable energy investments, we are enhancing quality of life while building a greener, more inclusive and resilient future for people,” said EIB Vice-President Kyriacos Kakouris.

Part of the EIB loan will go to works at the municipal zoo, including upgrading animal pavilions, visitor areas and energy and water management. These efforts support climate action by reducing greenhouse gas emissions.

The EIB loan stems from an EU initiative, the Just Transition Mechanism (JTM), which aims to address the social and economic impacts of transitioning to a climate-neutral economy. By blending loans from the EIB with grants from the European Commission, JTM supports investments in the regions most affected by this transition, ensuring no community is left behind. Accordingly, the EIB will finance up to 72% of the overall project costs, complemented by funding from EU grants and the city’s budget. The project promoter benefits from the support of the InvestEU Advisory Hub and will apply for a Public Sector Loan Facility (PSLF) grant, which would amount to 25% of the EIB loan amount.  

The EIB loan aligns with the city’s development strategy supporting sustainable urban renewal. The EIB will also advise the City of Ústí in terms of conducting investments in municipal infrastructure, zoo pavilions, water management and energy savings.

“Public housing, mobility and energy are key topics in our transformation process and in the long-term and sustainable direction of the city, and I am very pleased that we have managed to secure financing for these types of projects through cooperation with the EIB. I believe that we are only beginning our cooperation with the EIB, that will significantly advance the city and our zoo, which can become a truly modern and energy-self-sufficient area. We are also striving to access EIB support within the ELENA programme,“ said Ústí nad Labem Mayor Petr Nedvědický.          

This EIB loan overcomes obstacles to market financing, ensuring that Ústí nad Labem can invest in essential public goods, services and a sustainable future.

Background information

About the EIB and Czechia

The European Investment Bank (EIB) is the long-term lending institution of the European Union. It finances investments contributing to EU policy goals. The EIB Group invested €2.47 billion in Czechia in 2024, supporting regional development and boosting economic resilience while also enhancing environmental sustainability and improving quality of life.

About PSLF and the Just Transition Mechanism

The Public Sector Loan Facility aims to alleviate the social and economic effects of the transition towards climate neutrality in the EU regions. This blending facility combines loans from the EIB with grants from the European Commission to help mainly public sector entities in the most hard-hit EU regions, which are identified in the territorial just transition plans, to mobilise additional public investments and meet their development needs in the transition towards climate neutrality. The first PSLF call for proposals was launched on 19 July 2022 with ten intermediate cut-offs until the end of 2025. There are three cut-off dates per year planned until the end of 2025. A second call for proposals will be launched in 2026.

To find out more about PSLF and PSLF-funded projects, please visit the CINEA website.

CINEA

The European Climate, Infrastructure and Environment Executive Agency (CINEA) is an executive agency established by the European Commission to implement parts of EU funding programmes for transport, energy, climate action, environment, maritime fisheries and aquaculture.

CINEA aims to support its beneficiaries, establish strong partnerships, deliver high-quality programme and project management, foster effective knowledge-sharing and create synergies between programmes, to support a sustainable, connected and decarbonised Europe.