The European Union (EU) Recovery and Sustainability Mechanism (ANM) has applied for the most money-intensive proposals for the approximately two billion available funding for Latvia. Ministry of Economics (IN), Ministry of Transport (MoU) and the Ministry of Environmental Protection and Regional Development (VARAM), according to calculations by the Delphi portal.
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It has already been reported that ministries and independent institutions have submitted projects to the ANM EUR 7.5 billion. Summarizing the proposals submitted by all Latvian ministries, it can be concluded that over one billion euros are expected to be acquired by the MoE, MoU and MEPRD. The portal “Delfi” has compiled the initial offer of the ministries, which was submitted to the Ministry of Finance by September 11.
Ministries point out that the proposals are currently being refined.
EM: Housing, energy efficiency and productivity
According to the MoE, the ministry has applied for funding for economic transformation and productivity growth for a total of 500 million euros. For this half a billion euros, it is planned to develop industrial territories and parks of national significance, create new tourism objects in the regions, increase the competitiveness of businesses by implementing projects that develop new products and technologies, as well as ensure working capital and capital adequacy.
The MoE also plans to promote the availability of housing for 230 million euros. The Ministry plans to promote the availability of housing for persons who cannot afford quality housing at the market price by building rental houses, implement the construction of new multi-apartment houses and promote the availability of social housing.
In turn, it is planned to increase energy efficiency in multi-apartment houses, private houses and companies by 656 million euros. It is also planned to reduce emissions in the energy and transport sectors, promote solar energy production, renovate historic buildings and implement other things.
The more than one and a half billion euros of funding available to Latvia from the ANM Fund has also encouraged entrepreneurs to turn to ministries, this was previously reported by the portal “Delfi”. According to the MoE, the ministry has not specifically invited companies to submit proposals, but has received proposals from several companies and associations.
Evita Urpena, Head of the Public Relations Department of the MoE, emphasized that the Ministry’s proposals for the plan are not specific projects, but support programs, instruments where the supported projects will be screened in a certain selection, which will be included in the program conditions.
“MoE highly appreciates these projects submitted by entrepreneurs and associations, because they help us to work on the planning of new programs, they allow us to understand what is important for entrepreneurs, what support they need, what the Latvian economy needs,” Urpena pointed out.
SM: Reduction of CO2 emissions
As Ilze Greiškalna, the representative of the MoD, reminded the portal “Delfi”, in its recommendations to Latvia, the European Commission has pointed out the need to improve the transport infrastructure in Riga and its surroundings, as well as to reduce greenhouse gas emissions.
Consequently, the initial proposal of the MoU to the Rehabilitation Fund envisages the implementation of a change of habits in the Riga metropolitan area by restructuring traffic flows. As explained by the ministry, this will reduce the negative impact of transport on the environment.
The MoU has not applied for specific projects to the Ministry of Finance, therefore no specific funding has been applied for. However, the MoU has submitted a proposal for a reform plan to reduce CO2 emissions in and around Riga. The plan covers a range of needs and projects initially identified, totaling more than € 1.2 billion. The list of specific projects, as well as the approximate amounts, could be known tentatively at the beginning of next year.
MEPRD: Greenery, reducing inequalities and digitalisation
MEPRD has submitted proposals with a total value of 1.171 billion euros. The ministry’s proposals are presented in three areas: climate change and sustainability, reducing inequalities and digital transformation.
For example, the ministry is proposing 300 million euros to rebuild and renovate the country’s regional and local roads. In turn, MEPRD encourages to invest 200 million in public infrastructure in order to promote business development in the regions and promote Riga’s international competitiveness.
With the support of 150 million euros, the production and use of biomethane could be promoted, the ministry plans. This would facilitate the transition to a more rational and efficient use of resources in accordance with the principles of the circular economy and reduce GHG emissions in the transport, waste and water sectors, as well as the use of renewable energy sources.
MEPRD reminds that since the submission of proposals – September 11 – active work with other ministries has been continuing, clarifying and integrating the offers of the ministries. At the same time, the European Commission has also issued more detailed explanations and new guidelines for the use of Recovery Fund funding.
It is recalled that project information is a request submitted and not approved projects and approved costs.
Forget about “how it meets, it will meet”
As the chairman of the Fiscal Discipline Council (FDP), a professor at the University of Latvia, reminds Inna Steinbuka, the project approval process must be transparent.
“I agree with the European Commission’s view that economic transformation and structural change are inevitable due to the Covid-19 crisis and its consequences. Some sectors will shrink, others are likely to take a second breath. It is I would go on my own in terms of the idea – how will it meet, it will meet, “said Steinbuk.
“With these financial resources, which have unexpectedly become available to us just like a sky-high, we need to promote structural reforms and changes that will promote the country’s development,” said the professor.
Earlier, she told the portal “Delphi”that, in assessing the proposals submitted by the authorities, it is essential not to simply “bury” the money in implementing only infrastructure projects, but to plan in such a way that the impact on GDP growth is felt later.
It has already been announced that the agreement reached by the European Council is creating a new and important instrument for the EU budget, the Recovery and Sustainability Mechanism. The purpose of the facility is to support reforms and investments, in particular those related to the transition to a green and digital economy, and to reduce the social and economic impact of the Covid-19 crisis.
Funding is available for the period until the middle of 2026, and, according to the MoF estimates, the guaranteed part of EU funding in the Latvian envelope would be about 1.6 billion and the variable part about 300 million euros. In addition to Latvia, loans in the amount of another 2.3 billion euros would be indicatively available.
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