News EU funds

In 2024, as in 2023, the Cohesion Policy European Union (EU) Funds and the Recovery and Resilience Facility are forecast to invest more than 1 billion euros. After investment review and reallocations, the investment pace is expected to be even more intense in the following years, with indicative figures of over 1.6 billion euros in 2025 and 1.3 billion euros in 2026. Meeting these projections will depend to a large extent on the capacity of line ministries to develop the investment framework for EU funds for the 2021-2027 period. This is evidenced by the semi-annual report on the implementation status of EU funds and foreign financial aid prepared by the Ministry of Finance (MoF) at the meeting of the Cabinet of Ministers (CoM) on Tuesday, May 28.

In the implementation of investments for the 2021-2027 period, investment Cabinet Regulations have now been approved for almost 40% of the available EU funding (1.62 billion euros). In active cooperation with the social partners, the criteria for project call-backs have been approved for 68% of the funding. In total, 1.1 billion euros of project selections have now been launched or have already been finalised. Project implementation contracts have been signed for 382 million euros and payments have been made to project promoters for 62 million euros.

Considering the previously identified insufficient pace of EU funds investment for the 2021-2027 programming period, the Ministerial Committee on EU Funds has agreed to streamline and redirect investments. The plan is to reallocate funding to measures that target economic growth, address structural challenges in the economy and at the same time significantly increase investment in the coming years. This gives the opportunity to make full use of the EU fund allocation throughout the planning period until the end of 2029. With new project selections and implementation timetables still to be planned, the volume of support payments to project promoters will increase significantly in the coming years.

Informal consultations with the European Commission have already started on the potential redistributions. In May and June, MoF will also consult with social and cooperation partners about redistributions. The draft amendments to the EU funds program are planned to be forwarded for approval by the EU funds monitoring committee and the CoM indicatively by July 31, 2024.

The implementation of EU funds in the 2014-2020 programming period ended in 2023. Completed projects are being checked and final payments made to project promoters. There is also the possibility for some projects to be completed at a later date, either with co-financing from the EU funds for the 2021-2027 programming period or with the implementers' own resources. At the moment, forecasts show that we will be able to receive all available EU fund allocations of 4.6 billion euros from the EU.

On May 27, Latvia received the second Recovery Fund payment in the amount of 336 million euros for the fulfillment of 43 indicators. By May 2024, a total of 79 indicators out of 229 reference points and goals set for Latvia have been met. Investment regulations have been approved for 92% of the available funding of the Recovery and Resilience Facility, project selection has been announced for 89% or 1.75 billion euros. Currently, projects for 61% of the total funding, or 1 207.3 million euros, are being implemented. In several areas of activity, entrepreneurs, municipalities and non-governmental organizations still have the opportunity to apply for their projects and implement them, thus strengthening the country's economic capacity and resilience. The implementation of the Recovery and Resilience Facility ends in 2026.

This year marks the end of the active investment period for EEA and Norway Grants for 85.4 million euros. The eligibility period for investment project expenditure expired on 30 April this year, but the funds under the Bilateral Cooperation Fund can be used for one more year, until 30 April 2025. Savings from investment projects are planned to be directed to the program's bilateral activities and support of Ukrainian refugees in Latvia.

The Swiss-Latvian cooperation programme is in its start-up phase until 2029, with targeted investments for the remediation of a historically contaminated site, the development of work-based education, science and innovation, and childhood cancer care. The line ministries involved are continuing to develop and fine-tune programmes with Swiss partners for 42.4 million euros of investment, and the national framework is being developed in parallel. The investments are expected to be implemented starting from 2025.