The application is submitted to finance the reconstruction of 2.23 km of deteriorated heat supply networks of 400 mm and 800 mm diameters by installing new pre-insulated modern heat supply networks. After completion of the project, heat losses in reconstructed heat supply networks are expected to decrease from 4 389 MWh/year to 989 MWh/year. The estimated heat loss will be reduced by about 3 400 MWh/year or 77.5 % (weighted average) compared to the current losses (after assessing the water leakage). The project is carried out in order to ensure a balanced and sustainable development of energy, ensuring reliable energy supply to Kaunas city district heating customers at the lowest possible cost and minimised pollution. During the project, the reconstructed heat supply networks will meet all the requirements for modern heat transfer equipment. Replacing old district heating networks renews obsolete infrastructure, reducing the likelihood of accidents in networks and increasing the reliability of heat supply to consumers. The company benefits from the refurbishment of the heat supply infrastructure, the reduction of operating costs and the provision of a service to customers.