Atveseļošanas fonds EU funds NextGenEU

On Tuesday, February 20, the Cabinet of Ministers examined the monthly information report on the implementation of European Union (EU) funds, the Recovery Fund (RF) and other foreign financial instruments.

Regarding the information published in the media about the possible loss of 500 million euro support from EU funds, Ministry of Finance (MoF) clarifies that the informative report of the EU funds provides information not about the loss of funding, but about the shift in the cash flow plan - tentatively around 500 million euros in 2024, in case the EU fund investment forecasts presented by the sectoral ministries come true. In effect, the implementation of projects is postponed to future years.

Given the insufficient pace of implementation of the EU funds for the 2021-2027 programming period, the MoF has now also identified a risk of not reaching the minimum financial volume for investment expenditure in 2025 and 2026 set by the European Commission (EC). To mitigate these risks, MoF organised a meeting of the EU Funds Ministerial Committee on 23 January this year, where it decided on solutions to develop a roadmap for the reallocation of EU funds, which foresees the development of amendments to the Programme for the programming period 2021-2027.

Ministries of the sectors submit to the Ministry of Finance justified proposals for investment optimization, which significantly increase the pace of investments and in the following years meet the minimum annual declared expenditure EC goals, as well as are aimed at economic growth and solving structural challenges of the national economy. At the moment, technical work is underway, MoF is collecting redistribution proposals. After the final information is collected, redistribution proposals and potential funding sources will be considered by the thematic committee of EU funds in March 2024. In the 2nd quarter of 2024, MoF will submit the Program amendment project to the government for approval.

The €4.6 billion of EU funds for the 2014-2020 programming period is fully committed to investment projects in Latvia. This was ensured by the risk-balancing decisions already taken pre-emptively by the Government - the possibility of budget overcommitments of up to €164 million for additional investments in new projects, as well as the use of the EC's option to re-finance at least €60 million of payments for heating support to vulnerable households to the EU Funds programme and other reallocations of funding.

In the 2021-2027 programming period, Latvia has €4.4 billion of EU funding available. In 2023, the line ministries drafted half or 47% of the planned Cabinet regulations for €1.31 billion of the planned €2.8 billion of EU funds and national funding. During this period, 51 project selections have been launched by 22 January 2024, with a total EU funding support of €788 million (16% of the EU allocation). The first 13 projects are under implementation with a total EU funding of €284 million (7% of the EU allocation).

On 22 December 2023, Latvia submitted a second payment request to the EC for the achievement of 43 indicators, in order to receive €335.7 million from the EC. By January 2024, a total of 61 indicators out of the 229 targets set for Latvia have been met. Investment regulations have been approved for 93% of the available funding, while projects for 53%, 1049.7 million euros, are being implemented. In 2024, 10 out of 30 indicators for 2023 must be fulfilled to receive 275.1 million euros from the EC and 41 out of 44 indicators for 2024 to receive 334.8 million euros.