Riga, December 1, 2020 - Today the Cabinet of Ministers' (MK) supports the draft orders prepared by the Ministry of Environmental Protection and Regional Development, entitled “On the supported municipal investment projects for granting State loans to mitigate and prevent the effects of the emergency in relation to the spread of Covid-19”, by granting the State loan to the local government investment projects submitted for project applications. in the sixth-final round of the evaluation of applications from 2 October to 16 November 2020. 

Minister for Environment and Regional Development, p.i. Artis Pabriks: “Local economic reinforcement initiatives in the wake of the crisis caused by Covid-19 play an important role in the recovery process. I am pleased that we have succeeded in providing support to many local governments in Latvia, which, in the current circumstances, not only strengthens the local economy but also provides new job opportunities for Latvian residents."

Received a total of 25 municipal investment projects during this year's closing cycle for investment projects. At the same time, two municipal investment projects were also evaluated during this project submission cycle, the evaluation of which was postponed in previous project submission cycles.

17 investment projects totalling EUR 4 550 390,23 were supported, of which EUR 3 412 737,29 is a government loan. 10 investment projects were rejected, among the main reasons for the rejection is the failure to meet financial criteria, the investment project does not meet the objective of the MK rules, as well as the development of an incomplete technical project – no construction project has been developed and approved by the building authority. 

Areas where local governments were able to submit projects for support include the development of transport infrastructure – the highest proportion of investment projects supported, increasing the energy efficiency of buildings, adding residents' real estate to centralised sewer and water networks, providing educational institutions in line with hygiene requirements, and the development of ways of providing local government services that reduce the need for face-to-face communication, such as contact-free solutions.

In general, 307 investment projects already prepared and supported by the MK, submitted by municipalities for a total of 134.6 million EUR, of which the State loan is 99.6 milj. EUR. The implementation of the projects is to be started this year but to be completed by 31 December 2021.

When applying for a State budget loan, it should be noted that the amount of the investment project loan cannot exceed 75% of the total costs and that local governments should provide co-financing of not less than 25%. It is also essential that the proportion of government borrowing that municipalities plan to use in 2020 is not less than 30% of the total amount of borrowing.

The submitted local government investment projects were evaluated by a commission, composed of representatives of the Ministry of Environmental Protection and Regional Development, the Ministry of Transport, the Ministry of Economy, the Ministry of Agriculture and the Ministry of Finance.

On 14 July 2020, MK Regulation No 456 was adopted to support local governments in the event of an emergency related to the distribution of Covid-19, which lays down the conditions and procedures for the granting to municipalities of a State budget loan to mitigate and prevent the effects of the emergency by granting a loan to investments in projects starting in 2020.

The local government lending programme is part of the Ministry's economic recovery plan, which provides for the restructuring of the investments initially planned for social, economic and environmental responsibility, in order to ensure that the funding available is fundamentally channelled to minimise the effects OF COVID-19 on the economy, including by creating job opportunities for the population.

Public Relations Department
Ministry of Environmental Protection and Regional Development
Tel. 20200305; 67026533,
e-mail: prese@varam.gov.lv