In the next five years, the ability of Latvia’s state budget to finance major projects will be very limited. This is why project implementers have to consider other sources of financing, including private and public partnership (PPP), said Sanda Liepiņa, advisor to Minister of Finance Arvils Ašeradens, at the “PPP in Latvia: Making tomorrow together” conference organised by the Central Finance and Contracting Agency (CFCA).
She said there are discussions continuing on a government level about implementation of PPP projects, as the budget’s capabilities will be limited. Liepiņa said the situation is similar in other countries, and those countries, too, are now considering PPP projects.
Liepiņa also pointed out that one PPP project has been implemented in Latvia in the last five years – the Ķekava bypass, but 75 PPP projects have been implemented in Lithuania, which has also had a significant impact on Lithuania’s gross domestic product. At the same time, Liepina admitted that the Kekava project is close in scope to all Lithuanian projects together.
She said Latvia is still at the beginning of the road, but it is necessary to work and prepare PPP projects that could be offered to private partners on the market.
Liepiņa said that PPP projects are an opportunity to involve institutional investors and Latvian pension funds.
Mārtiņš Brencis, Deputy Director of CFLA, acknowledged at the conference that currently several PPP projects in Latvia have already prepared financial and economic calculations (FEA). Several FEAs are under evaluation – Riga lighting project, Daugavpils lighting project, Riga airport concession project, Bauska Municipality Cultural Center project, Smiltene heating project.
Brencis said the affordable rental apartment construction PPP project, in which the planned investments are at least EUR 100 million (without VAT), is currently being developed by “Valsts nekustamie īpašumi” in cooperation with the European Investment Bank.
The CFCA has also approved the FEA for the construction of the Bauska and Iecava bypass roads, where the planned investments for the Iecava bypass are EUR 233.4 million excluding VAT, and for the Bauska bypass – EUR 92 million excluding VAT.
In the project for the modernisation of street lighting in Riga, the planned investment is EUR 52.4 million (excluding VAT). Riga City Council is currently working on FEA. Daugavpils City Council is working on FEA for the street lighting modernisation project with an investment amount of EUR 6.9 million (excluding VAT). Marupe Municipality is also developing a FEA for a secondary school project with EUR 33 million (excluding VAT) for planned investments.
Brencis emphasized that the CFLA is increasingly interested in PPP projects, so it is planned to establish a CFLA advisory board on PPP issues, as well as to develop and implement a PPP project curriculum for public sector specialists. The CFLA also plans to continue actively advising and educating in the field of PPPs, to develop standardized solutions to facilitate the preparation of FEA documentation.
Also read: Latvian Saeima continues reviewing state budget for 2025
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Publish date : 2024-12-05 04:24:00
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