Today, on August 24, the government supported the draft financing agreement for the Recovery Fund between the European Commission (EC) and Latvia, authorizing the Minister for Finance Jānis Reirs to sign the financing agreement. Within two months after signing the agreement, Latvia will receive pre-financing in the amount of 13% or 237 million euros from the total amount of financing of the Recovery Fund.
Minister for Finance J.Reirs: “Signing of the agreement with the EC is the final step for Latvia to receive the investments of the Recovery Fund in the amount of 1.82 billion euros in the next five years and implement the measures provided for in the fund plan. We have successfully provided the preconditions for receipt of the first part of the funding. Achieving the goals set forth in the plan will allow to effectively invest also the future financing from the fund."
After receiving the pre-financing, Latvia will be able to attract further funds, achieving the specific goals of projects and reforms. Latvia's progress will be assessed every year and funding will be available accordingly. It is expected that the first investments of the fund will be made in the field of health, where there are already projects of high readiness.
The investments provided for in the plan of the Recovery Fund in six strategic areas will enable to perform significant reforms to help the country to recover from the economic downturn caused by the pandemic. Following the EC recommendations, 20% of the funds are planned to be allocated to digitalisation and 37% - for achieving climate objectives. EUR 370 million (20% of the funds) will be allocated for reducing inequality, EUR 181.5 million (10%) – to the health sector projects, EUR 196 million (11%) – to transformation of economy and productivity reforms, and EUR 37 million (2%) – for strengthening the rule of law.
Recovery and Resilience Facility is a new budget programme under the centralised management of the EC, established in addition to the European Union multiannual budget for the programming period of 2021 - 2027. It’s purpose – to support reforms and investments related to the transition to a green and digital economy, as well as to reduce the social and economic impact caused by the crisis due to pandemic.