Financial Services, Insurance, Legislation, Lithuania, Loan

The Cabinet approved a 10-year loan carrying a zero percent interest rate for Sodra.

"We are taking the money from the state treasury and lending it on at zero interest, which does not mean that the money costs nothing to the state," Finance Minister Rimantas Sadzius said during the Cabinet's meeting.

"To be specific, this amount of money was borrowed in late 2015 at 1.209 percent annual interest. Thus, around 5 million euros in state budget funds will be paid (annually) on this amount of money," he said.

According to the minister, the state has in the past provided loans to Sodra at zero interest rates, which this year will cost the state budget 28.5 million euros, or 33.5 million euros in total, including the new loan.

Based on Sodra's 2016 cash-flow forecast, the fund's projected budget expenditure this year will be 742.8 million euros higher than its revenue. This deficit is to be covered by loans from the government and commercial banks.