Ministry of Finance submitted to the European Commission Recovery and Resilience Facility plan on April 30. This puts Latvia among EU member states that have prepared and submitted their recovery plan to the EC, as reported by the ministry.
12 out of 27 EU member states – Austria, Belgium, Denmark, Germany, Greece, Spain, France, Italy, Latvia, Luxembourg, Portugal, Slovenia and Slovakia – have submitted their plans.
EC is committed to reviewing these plans within two months.
Development of criteria for the projects, public procurements and submission of specific offers will happen once recovery plans have been approved. This could happen in the second half of 2021, according to Ministry of Finance. Projects will be allowed to be submitted by entrepreneurs and state organizations. Financing will be available until mid-2026.
Latvia’s plan was submitted to the EC for the entire portion of support grants worth EUR 1.82 billion. This is the biggest financing amount available to Latvia. 40% or EUR 643.21 million from Recovery and Resilience Facility is intended as direct aid for entrepreneurs. A little over 60% or EUR 1.15 billion will be available as public order for entrepreneurs. State administrative expenditures are estimated at EUR 26.64 million.
The plan provides support in six areas. 20% of the fund’s financing is planned to be invested into digitization efforts, 37% is planned to be diverted towards climate goals. EUR 370 million will be diverted towards reduction of inequality (20% of the fund’s available financing), EUR 181.5 million (10%) will be diverted towards healthcare projects, EUR 196 million will be diverted towards economic transformation and productivity reforms and EUR 37 million will be diverted towards enhancement of the rule of law.
Investments are also planned towards energy efficiency across Latvia.
Investments are planned for power lines and infrastructure to help reduce the price of electricity by 3-5% for end consumers. It is also planned to help increase energy efficiency of different companies and provide entrepreneurs with an option to develop energy efficiency projects for business infrastructure.
A great deal of support is planned to train Latvian residents’ digital skills on all levels, from children to seniors. At the same time there are plans for investments for digitization in enterprises, management, accounting and internal resource management system modernization.
More investments are planned for the development of national and regional roads.
With help from industrial zones it is planned to provide well-paid jobs in regions. It is also planned to increase housing accessibility by developing an apartment rent fund. It is also planned to increase support for social and employment services by increasing financing towards deinstitutionalization efforts.
Support will be provided towards research and development of innovation and private investments while also investing in the Cluster Program to help promote cooperation between entrepreneurs and universities. Money will also be diverted towards university management reform and support of science and research to restore the scientific potential.
The Recovery and Resilience Facility is a new budget program managed by the European Commission formed alongside the 2021-2027 planning period of the EU multi-year budget. The objective is supporting reforms and investments associated with the transition towards green and digital economy, as well as reducing social and economic impact caused by the crisis. (BNN/Business World Magazine)
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