Commission endorses Latvia’s €1.97 billion modified recovery and resilience plan, including a REPowerEU chapter
Today, the Commission has given a positive assessment of Latvia’s modified recovery and resilience plan (RRP), which includes a REPowerEU chapter. The plan is now worth €1.97 billion in grants and covers 25 reforms and 63 investments.
Latvia’s REPowerEU chapter consists of a new reform and three new investments to deliver on the REPowerEU Plan’s objectives to make Europe independent of Russian fossil fuels well before 2030. These measures focus on reducing overall reliance on fossil fuels, accelerating the deployment of renewable energy, increasing energy storage capacity and upgrading and modernising its electricity transmission and distribution networks. Latvia is also modifying 35 measures because of objective circumstances that.
In particular, the amendments to the original plan are based on the need to factor in:
very high inflation experienced in 2022;
supply chain disruptions caused by Russia’s war of aggression against Ukraine, which have made investments more expensive and have caused delays;
unforeseen bottlenecks outside of the control of the national authorities, such as the lack of bids in procurement processes;
manifestly better alternatives to achieve the original ambition of some measures.
Latvia has removed one investment from the original plan. This concerns the construction of infrastructure along the Via Baltica corridor for 5G coverage. Latvia has therefore proposed to redistribute the funds originally allocated to this investment to a measure for the development of broadband or very high-capacity network (“last mile”) infrastructure which was already in the plan.
To finance the increased ambition of its plan, Latvia has requested to transfer to the plan its share of the Brexit Adjustment Reserve (BAR), amounting to €10.9 million. These funds, added to Latvia’s RRF and REPowerEU grant allocations, amounting to €1.83 billion and €123.8 million respectively, make the approved modified plan worth €1.97 billion.
An additional boost to Latvia’s green transition
As a result of the addition of a REPowerEU chapter, the modified plan has a stronger focus on the green transition, devoting 42% (up from 37.6% in the original plan) of the available funds to measures that support climate objectives.
The reform and three investments included in the REPowerEU chapter contribute to the green transition. The reform will introduce a regulatory framework for energy communities, amend norms on electricity trade and consumption with the objective of promoting self-consumers and supporting vulnerable groups of society, and lay down conditions for a more optimised use of existing electricity network and for increasing the uptake of sustainable biomethane to be injected into existing natural gas networks. The three investments will contribute to i) upgrading, securing, and digitalising electricity transmission and distribution grids, in view of a greater integration of variable renewable energy, ii) accelerating the synchronisation of the national electricity grid with the Continental Europe electricity networks, and iii) increasing the uptake of sustainable biomethane.
The investment in the plan continues to focus on clean transport, energy efficiency of private and public buildings, and flood risk reduction measures. The plan also preserves the originally planned legislative action to facilitate the deployment of onshore wind energy at national level.
Reinforcing Latvia’s digital preparedness and social resilience
Latvia’s modified plan allocates 23% (up from 21% in the original plan) of its funds to support the digital transition, for instance through investments in the digitalisation of the country’s public administration and public services. It also fosters the digital transition for businesses, including small and medium-sized enterprises, and supports the development of high-tech digital products and services, as well as the introduction of Industry 4.0 solutions in production processes. Moreover, the modified plan includes investments to deploy high-speed broadband. Reforms for digital upskilling the country’s workforce will complement this investment effort by improving the basic and advanced digital skills of citizens, businesses and civil servants.
The modified plan’s social dimension remains ambitious. Investments for a better accessibility to public buildings and housing of persons with disabilities are expected to improve their access to the job market and, more broadly, to contribute to their social inclusion. The modified plan maintains its reform and investment commitments to increase the resilience, accessibility and quality of healthcare. In the education sector, the modified plan will continue delivering a comprehensive higher education reform aimed at boosting the international competitiveness of national higher education institutions through improved governance, a modernised accreditation mechanism and revised funding principles.