EUROPEAN COMMISSION

Brussels, 22.6.2021

COM(2021) 340 final

2021/0164(NLE)

Proposal for a

COUNCIL IMPLEMENTING DECISION

on the approval of the assessment of the recovery and resilience plan for Latvia

{SWD(2021) 162 final}

2021/0164 (NLE)

Proposal for a

COUNCIL IMPLEMENTING DECISION

on the approval of the assessment of the recovery and resilience plan for Latvia

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility 1 and in particular Article 20 thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1)The COVID-19 outbreak has had a disruptive impact on the economy of Latvia. In 2019, the gross domestic product per capita (GDP per capita) of Latvia was 51,0 % of the EU average. According to the Commission’s Spring 2021 forecast, the real GDP of Latvia declined by 3,6 % in 2020 and is expected to decline by 0,3 % cumulatively in 2020 and 2021. Longer-standing aspects with an impact on medium-term economic performance include in particular the tax compliance, skills shortages, poor health outcomes and weak innovation performance.

(2)On 9 July 2019 and on 20 July 2020, the Council addressed recommendations to Latvia in the context of the European Semester. In particular, the Council recommended to reduce taxation for low-income earners by shifting it to other sources, particularly capital and property, and by improving tax compliance and to continue progress on the anti-money laundering framework. It also recommended to strengthen the social safety net and address social exclusion notably by improving the adequacy of minimum income benefits, minimum old-age pensions and income support for people with disabilities, to increase the quality and efficiency of education and training, in particular of low-skilled workers and jobseekers, including by strengthening the participation in vocational education and training and adult learning, and to strengthen the resilience, accessibility, quality and cost-effectiveness of the health system including by providing additional human and financial resources. It recommended to focus investment on the green and digital transition, in particular on research and innovation, clean and efficient production and use of energy, sustainable transport and digital infrastructures. With regard to combating the impact of the crisis, it recommended to provide adequate income support to the groups most affected by the crisis and to mitigate its employment impact, including through flexible working arrangements, active labour market measures and skills. Finally, it recommended to strengthen the accountability and efficiency of the public sector, in particular with regard to local authorities and state-owned and municipal enterprises and improving the conflict of interest regime. Having assessed progress in the implementation of those country-specific recommendations at the time of submission of the recovery and resilience plan, the Commission finds that substantial progress has been achieved with respect to the recommendations on fiscal policy, anti-money laundering, income support and on liquidity support to combat the impact of the crisis.

(3)[The Council recommendation on the economic policy of the euro area 2 recommended to euro area Member States to take action, including through their recovery and resilience plans, to, inter alia, ensure a policy stance which supports the recovery and to further improve convergence, resilience and sustainable and inclusive growth. The Council recommendation also recommended to strengthen national institutional frameworks, to ensure macro-financial stability and to complete EMU and strengthen the international role of the euro.] [If the Council recommendation is not adopted by the time of the CID adoption, please remove the recital].

(4)On 30 April 2021, Latvia submitted its national recovery and resilience plan to the Commission, in accordance with Article 18(1) of Regulation (EU) 2021/241. The national ownership of the recovery and resilience plans is underpinning their successful implementation and lasting impact at national level and credibility at European level. Pursuant to Article 19 of that Regulation, the Commission has assessed the relevance, effectiveness, efficiency and coherence of recovery and resilience plan, in accordance with the assessment guidelines of Annex V to that Regulation.

(5)The recovery and resilience plans should pursue the general objectives of the Recovery and Resilience Facility established by Regulation (EU) 2021/241 and of the EU Recovery Instrument set up by Council Regulation (EU) 2020/2094 3 in order to support the recovery in the aftermath of the COVID-19 crisis. They should promote the Union´s economic, social and territorial cohesion by contributing to the six pillars referred to in Article 3 of Regulation (EU) 2021/241.

(6)The implementation of the Member States’ recovery and resilience plans will constitute a coordinated effort of investment and reforms across the Union. Through the coordinated and simultaneous implementation of these reforms and investments and the implementation of cross-border projects, these reforms and investments will mutually reinforce each other and generate positive spillovers across the whole Union. Therefore, about one third of the impact of the Facility on Member States’ growth and job creation will come from spillovers from other Member States.

Balanced response contributing to the six pillars

(7)In accordance with Article 19(3), point (a) and section 2.1 of Annex V to Regulation (EU) 2021/241, the recovery and resilience plan represents to a large extent (Rating A) a comprehensive and adequately balanced response to the economic and social situation, thereby contributing appropriately to all six pillars referred to in Article 3 of Regulation (EU) 2021/241, taking the specific challenges and the financial allocation of the Member State concerned into account.

(8)The plan includes a balanced set of reforms and investments aimed at addressing country’s key challenges, stimulating recovery from Covid-19 crisis and laying foundation for its long-term growth. The plan includes 85 measures addressing Latvia’s main challenges and the policy areas of European relevance, thus covering all six pillars. The plan includes six components: green transition, digital transition, inequality reduction, health, productivity, and rule of law. The components’ objectives are complementary and the reforms leverage the impact of associated investments, notably by bringing structural change and increasing the participation and financing from the private sector.

(9)The plan focuses on Latvia’s main challenges that are the green and digital transitions, social exclusion, healthcare, regional disparities, digital skills and adult learning, and higher education, convergence and productivity growth, including research and innovation and support for business investments, and administrative capacity, including tax administration, public procurement and the judicial system.

Addressing all or a significant subset of challenges identified in Country Specific Recommendations

(10)In accordance with Article 19(3), point (b) and section 2.2 of Annex V to Regulation (EU) 2021/241, the recovery and resilience plan is expected to contribute to effectively addressing all or a significant subset of challenges (Rating A) identified in the relevant country-specific recommendations, including fiscal aspects thereof addressed to the Member State concerned or challenges identified in other relevant documents officially adopted by the Commission in the context of the European Semester.

(11)The recommendations related to the immediate fiscal policy response to the pandemic can be considered as falling outside the scope of Latvia’s plan, notwithstanding the fact that Latvia has generally responded adequately and sufficiently to the immediate need to support the economy through fiscal means in 2020 and 2021, in line with the provisions of the General Escape Clause. Moreover, the recommendation to achieve the medium-term budgetary objective in 2020 is no longer relevant, due both to the lapsing of the corresponding budgetary period and the activation in March 2020 of the General Escape Clause of the Stability and Growth Pact in the context of the pandemic.

(12)The plan includes an extensive set of mutually reinforcing reforms and investments that contribute to effectively addressing all or a significant subset of the economic and social challenges outlined in the country-specific recommendations addressed to Latvia by the Council in the European Semester in 2019 and in 2020, notably those in the areas of healthcare, such as the resilience, accessibility, quality and cost-effectiveness of the healthcare sector; education and skills, such as the quality and efficiency of the education system and digital skills; social inclusion, such as the minimum income benefits; research and innovation; investments, such as green and digital transition, affordable housing; public administration and business climate.

(13)Continued convergence remains Latvia’s key challenge in terms of improving its population’s living standards. The reforms and investments in skills, education and training, healthcare and social inclusion should contribute to improving Latvia’s productivity and long-term inclusive growth. Significant investments are envisaged for upskilling and reskilling measures aimed to equip the workforce with the required skills and new affordable housing to improve regional labour mobility. Reforms and investments to enhance the resilience and accessibility of the health system, support the provision of integrated care services and raise the capacity of health institutions to adapt to crisis situations are included in the plan. The plan contributes to addressing the social challenges by further improving the minimum income support system, through an annual indexation mechanism and linking it to the development of the median income. Other investments in the accessibility and rehabilitation infrastructure for persons with reduced mobility and disabilities, as well as long-term care investments for elderly should also contribute to achieving progress in addressing current challenges.

(14)The plan significantly reinforces the investments in research and innovation and supports various public administration reforms. It also alleviates the socio-economic costs of the green and digital transitions, while taking into account regional disparities. The plan aims to make a significant change in the fragmented innovation system governance and create sustainable innovation ecosystems, thereby fostering higher overall investment. Significant investments are foreseen in the green and digital transitions, including investments in energy efficiency, electricity grid modernisation, public sector IT systems, basic and advanced digital skills, both in the public and private sector. Measures improving intermodal transport infrastructure within and around Riga aim to facilitate labour mobility and help curb growing energy consumption and greenhouse gas emissions from passenger cars. To tackle regional disparities, the plan builds on the administrative territorial reform and includes significant investments in industrial parks, municipal transport, road renovation, schools and affordable housing. Public administration accountability and efficiency should be strengthened through reforms and investments to fight the shadow economy and economic crime, improve the procurement system and innovation in the public sector. The plan is expected to continue work on the implementation of the anti-money laundering strategy by reforming the cooperation, information exchange and training systems between law enforcement agencies involved in the identification, investigation and trial of economic crimes, while strengthening their technical capacity.

Contribution to growth potential, job creation and economic, social and institutional resilience

(15)In accordance with Article 19(3), point (c) and section 2.3 of Annex V to Regulation (EU) 2021/241, the recovery and resilience plan is expected to have a high impact (Rating A) on strengthening the growth potential, job creation, and economic, social and institutional resilience of the Member State, contributing to the implementation of the European Pillar of Social Rights, including through the promotion of policies for children and youth, and on mitigating the economic and social impact of the COVID-19 crisis, thereby enhancing the economic, social and territorial cohesion and convergence within the Union.

(16)Simulations by the Commission show that the plan has the potential to increase the GDP of Latvia by 2 % by year 2026 4 . Latvia’s Stability Programme for 2021 points to a clear additionality effect of the plan as the public investment level is expected to be significantly above the pre-pandemic level that is 5,9 % of GDP on average over 2021 to 2024 compared with 5,1 % of GDP on average over 2017-2019.

(17)Investments and reforms in green and digital infrastructure, regional development, research and innovation as well as extensive support schemes for business investment will bolster Latvia’s growth potential over the medium to long term. Investments and accompanying reforms to the Riga transport system will boost the city’s competitiveness and ability to attract investments and talent. Measures to foster private investments in wind energy will contribute to reaching renewable energy targets and becoming a competitive low-carbon economy. Business investment support schemes will accelerate Latvia’s pursuit of higher export capacity and productivity growth, building on the fundamentals of industry, namely innovation, competition and a strong and well-functioning single market. Latvia’s plan foresees investments and reforms aimed at boosting the population’s skills. Investments in housing and infrastructure for peripheral regions will strengthen Latvia’s lagging regions’ growth opportunities. Altogether, these measures address long-standing challenges of Latvia’s economy – low innovation spending, a low uptake of modern technologies as well as significant regional disparities.

(18)Investments and reforms with the view to improving social inclusion and healthcare are expected to strengthen social cohesion and social protection. The introduction of indexation of minimum income benefits should ensure that the benefits are annually adjusted to the wage growth, contributing to their adequacy. Combined with the increase of the minimum income threshold of not less than 20 % of the median income, these measures are expected to reduce income inequality and improve the effectiveness of social transfers that have been identified among Latvia’s most important social challenges. Furthermore, investments in the health infrastructure combined with a reform aimed at attracting additional human resources to the health sector are expected to improve the accessibility of healthcare, the lack of which has predominantly affected the low-income earners and people living in peripheral areas.

Do no significant harm

(19)In accordance with Article 19(3), point (d) and section 2.4 of Annex V to Regulation (EU) 2021/241, the recovery and resilience plan is expected to ensure that no measure (Rating A) for the implementation of reforms and investments projects included in the recovery and resilience plan does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852 of the European Parliament and of the Council 5 (the principle of ‘do no significant harm’).

(20)The assessment regarding the compliance with the principle of ‘do no significant harm’ provided by Latvia in its recovery and resilience plan has been carried out in accordance with the ‘do no significant harm’ technical guidance of the European Commission (2021/C 58/01). It covers the six environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, namely climate change mitigation, climate change adaptation, sustainable use and protection of water and marine resources, circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems. The environmental impact is assessed at measure-level that is one individual assessment per reform or investment. Where needed, Latvia has proposed the implementation of mitigating measures to avoid significant harm. This is particularly the case for flood protection measures, where the compliance with the principle of ‘do no significant harm’ has been ensured by including a specific milestone. Accordingly, investments in flood protection have to ensure strict compliance with Union environmental law and ensure the absence of harm to the status of water bodies. The renovation of roads is accompanied by an investment in decarbonised transport to prevent harm to the objective of climate change mitigation.

Contribution to the green transition including biodiversity

(21)In accordance with Article 19(3), point (e) and section 2.5 of Annex V to Regulation (EU) 2021/241, the recovery and resilience plan contains measures that contribute to a large extent (Rating A) to the green transition, including biodiversity, or to addressing the challenges resulting therefrom. The measures supporting climate objectives account for an amount which represents 37,6 % of the plan’s total allocation calculated in accordance with the methodology of Annex VI to Regulation (EU) 2021/241. In accordance with Article 17 Regulation (EU) 2021/241, the recovery and resilience plan is consistent with the information included in the National Energy and Climate Plan 2021-2030.

(22)Latvia’s recovery and resilience plan focuses particularly on sustainable mobility. The overhaul of the Riga Metropolitan area and the associated investment programme in greening urban public transport and infrastructure should contribute strongly to decarbonising the Latvian transport sector. The recovery and resilience plan also includes measures with a focus on the improvement of energy efficiency in multi-apartment and public buildings and businesses and the upgrade of the electricity grid. This should contribute to improving energy efficiency and reducing greenhouse gas emissions in the building sector. The recovery and resilience plan also focuses on climate change adaptation thanks to investment in flood prevention and fire prevention which should directly contribute to the objective of adapting to the consequences of climate change. The plan contains no measures having biodiversity as their objective. However, some of the measures for climate mitigation may also be beneficial to the preservation of biodiversity, as climate change is one of the main threats to biodiversity.

Contribution to the digital transition

(23)In accordance with Article 19(3), point (f) and section 2.6 of Annex V to Regulation (EU) 2021/241, the recovery and resilience plan contains measures that contribute to a large extent (Rating A) to the digital transition or to addressing the challenges resulting from it. The measures supporting digital objectives account for an amount which represents 21 % of the plan’s total allocation calculated in accordance with the methodology of Annex VI to Regulation (EU) 2021/241.

(24)The digital measures included in the plan cover various aspects of the digital transformation encompassing public and private sector, skills and connectivity – with a focus on improving the competitiveness of the Latvian economy in the medium and long term. Poor basic digital skills, low uptake of digital solutions by businesses as well as a shortage of information and communication technology specialists are Latvia’s key digital challenges, impacting on workforce availability, competitiveness, resilience, use of government e-services and innovation alike. In response, Latvia’s plan includes sizeable investments in basic and advanced digital skills. Latvia’s plan also includes measures for the digital modernisation of public administration and the digital transformation of public services, including centralised public solutions. The plan addresses the challenges related to the digital transition also by supporting the digital transformation of businesses and creating a better environment for research and innovation with measures to improve the digitisation of small and medium sized enterprises as well as by creating the necessary framework for Latvia’s participation in the network of European Digital Innovation Hubs. The plan includes measures to deploy very high-speed broadband that should help further improve the digital infrastructure.

Lasting impact

(25)In accordance with Article 19(3), point (g) and section 2.7 of Annex V to Regulation (EU) 2021/241, the recovery and resilience plan is expected to have a lasting impact on Latvia to a large extent (Rating A).

(26)The implementation of envisaged reforms and investments is expected to bring structural improvements in the economy. The reform of the governance of the higher education institutions in particular should have a long-lasting impact on the quality of education and research in Latvia. Other measures include reforms aiming at fostering digitalisation and the support of digital skills, the reorganisation of municipalities, reform of the tax administration to reduce the shadow economy, and the centralisation and professionalisation strategy with regard to procurement. Structural improvements are also to be expected from the implementation of investments aiming at ensuring higher energy efficiency of buildings through renovation, investments in digitalisation, in support of the administrative territorial reform, in the health infrastructure of university and regional hospitals, in infrastructure for secondary outpatient service providers, and in infrastructure for industrial parks. Lasting impact of the plan can also be enhanced through synergies between the plan and other programmes including those financed by the cohesion policy funds, notably by addressing in a substantive manner the deeply rooted territorial challenges and promoting a balanced development.

Monitoring and implementation

(27)In accordance with Article 19(3), point (h) and section 2.8 of Annex V to Regulation (EU) 2021/241, the arrangements proposed in the recovery and resilience plan are adequate (Rating A) to ensure effective monitoring and implementation of the recovery and resilience plan, including the envisaged timetable, milestones and targets, and the related indicators.

(28)The Latvian recovery and resilience plan presents an administrative organisation for its implementation process in Latvia which should be ensured in the context of the existing national framework for the implementation of shared management funds. The plan provides an overview of the monitoring and reporting processes envisaged and clearly identifies actors and their roles and responsibilities for the performance of the internal control tasks. The Ministry of Finance will be tasked with coordinating the implementation of the plan, whereas the State Chancellery, line Ministries and the Central Finance and Contracting Agency should be tasked with ensuring and monitoring the implementation. The milestones and targets are realistic and the proposed indicators are relevant and robust. The measures in the plan are to some extent fragmented, which results in a high number of milestones and targets. They tend to be back loaded towards 2026, especially in the cases of infrastructure investment and horizontal schemes for business investment.

(29)Member States should ensure that financial support under the Facility is communicated and acknowledged in line with article 34 of Regulation (EU) 2021/241. Technical support may be requested under the Technical Support Instrument to assist Member States in the implementation of their plan.

Costing

(30)In accordance with Article 19(3), point (i) and section 2.9 of Annex V to Regulation (EU) 2021/241, the justification provided in the plan on the amount of the estimated total costs of the recovery and resilience plan is to a medium extent (Rating B) reasonable and plausible, is in line with the principle of cost efficiency and is commensurate to the expected national economic and social impact.

(31)Latvia has provided individual cost estimates for all investments included in the recovery and resilience plan. The cost breakdown is generally detailed and well-substantiated. The estimates are based on comparisons with past investments of similar nature and on market and price analysis. The assessment of the cost estimates and inherent supporting documents show that most of the costs are well justified and reasonable. The amounts proposed for financing were deemed appropriate and seen as establishing the plausibility of the cost estimates to a medium extent. Although the costs of most measures are deemed highly plausible (meaning the estimated cost is in the low to medium range compared to costs of similar reforms or investments), there are a limited set of measures for which the costing is deemed to be plausible to a low extent. Finally, the estimated total costs of the recovery and resilience plan are in line with the principle of cost-efficiency and commensurate to the expected national economic and social impact.

Protection of financial interests

(32)In accordance with Article 19(3), point (j) and section 2.10 of Annex V to Regulation (EU) 2021/241, the arrangements proposed in the recovery and resilience plan are adequate (Rating A) to prevent, detect and correct corruption, fraud and conflicts of interests when using the funds provided under that Regulation, and the arrangements are expected to effectively avoid double funding under that Regulation and other Union programmes. This is without prejudice to the application of other instruments and tools to promote and enforce compliance with EU law, including for preventing, detecting and correcting corruption, fraud and conflicts of interests, and for protecting the Union finances in line with Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council.

(33)The control system and arrangements proposed in the recovery and resilience plan are based on robust processes and structures used in the existing national framework for the implementation of structural funds. The plan clearly identifies actors (bodies/entities) and their roles and responsibilities for the performance of the internal control tasks. The relevant functions are appropriately segregated. The control system and other relevant arrangements, including for the collection and making available of data on final recipients, are adequate.

(34)The overall arrangements have been agreed by the Latvian Cabinet of Ministers on 18 August 2020. The adoption of further implementing acts is expected before the implementation of the plan has started. This did not hinder the assessment of the described process and structures. The Latvian authorities should provide an update on the adoption of those acts and relevant obligations should be set out in the Financing Agreement to be concluded in accordance with Article 23(1) of Regulation (EU) 2021/241.

(35)Latvia has indicated that existing IT-tools might require amendment or new development, such as the RRF module in the Cohesion Policy Funds Management Information System (KPVIS), and the use of transitional IT tools to meet specific management and reporting requirements described in the plan. In accordance with Article 20(5), point (e) of Regulation (EU) 2021/241, Latvia should implement this amendment of the existing IT-tools in order to comply with Article 22 of that Regulation, by confirming the status of its implementation with the first payment request. Where such payment request is not fully based on the functionalities of the amended IT-tools as described in the plan, a dedicated audit report on the system should be undertaken. The report should analyse any related weaknesses found and corrective actions taken or planned.

Coherence of the plan

(36)In accordance with Article 19(3), point (k) and section 2.11 of Annex V to Regulation (EU) 2021/241, the plan includes to a high extent (Rating A) measures for the implementation of reforms and public investment projects that represent coherent actions.

(37)The Latvian recovery and resilience plan is coherent, with consistent, mutually reinforcing reforms and investments, and synergies between the different components. The recovery and resilience plan contains measures for the implementation of reforms and public investment projects that represent coherent actions. The six components structure the investments and reforms and show their thematic relation and interlinkages well. Coherence is ensured within the components, with investments accompanying relevant reforms, as well as between the different components in the plan. The components included in the plan form a single framework for reforms and investments, the core task of which is to promote productivity, reduce inequalities, as well as promote the green transition and digital transformation. The six components are mutually reinforcing and coherent in their aims.

Equality

(38)With regard to gender equality and equal opportunities for all, the plan describes challenges in terms of gender equality and needs of persons with disabilities. The plan also explains which investments are expected to contribute to overcoming the challenges identified. The Latvian recovery and resilience plan foresees the implementation of various measures to promote gender equality and equal opportunities. To address the specific needs of persons with disabilities, the plan includes a measure to ensure accessibility of public and private buildings. In addition, all new public transport vehicles should be equipped with easy access for persons with reduced mobility. The situation of vulnerable groups is generally addressed, notably in the area of health. The plan also includes measures to improve educational opportunities for all school children. As regards gender equality, the plan includes measures aiming specifically at female engagement in information and communication technology career opportunities, with a view to increase the gender balance of information and communication technology specialists. The labour market situation for female jobseekers is expected to be improved by targeted measures aiming at the promotion of reconciliation of work and family life through the creation of remote and part-time work opportunities for households with children. The management and implementation of projects should ensure equal pay for work of equal value as well as diversity in management. In addition, the selection process of projects should be subject to the principle of non-exclusion and the obligation to combat any discrimination based not only on sex, but also on grounds of race or ethnic origin, religion or belief, disability, age, and sexual orientation.

Security self-assessment

(39)The plan includes a general security self-assessment for each component and lists the measures that have a security dimension. While the Latvian security self-assessment is general, the plan addresses cybersecurity and other digital security aspects. The self-assessment concludes that with the envisaged investments the security of the measures concerned would be strengthened.

Cross-border and multi-country projects

(40)The plan is contributing to various multi country projects (MCPs) and planned Important Projects of Common European interest (IPCEIs): Via Baltica 5G - corridor, European Network of Digital Innovation Hubs, European Common Data Infrastructure and Service (through the set-up of a potential IPCEI on Next Generation Cloud), Connected Public Administration, Genome Europe, Baltic States’ X-ray image exchange system (Baxe), and Microprocessors and semiconductors technologies. These projects are funded by other programmes as well, such as Digital Europe Program or Connecting Europe Facility, and by structural funds.

Consultation process

(41)A series of thematic public consultations open to civil society organisations, social partners, local authorities and other stakeholders were organised between December 2020 and March 2021. Representatives from social partners, business organisations, local governments and other stakeholders took part in the discussion on the plan between the Commission and the Latvian authorities. Partners’ suggestions for the plan are publicly available and have been published along with the plan. 

(42)Stakeholders’ engagement in the implementation is planned to be established through the management and control system used for the implementation of the Cohesion policy support, where stakeholders’ representatives form an integral part of the EU funds Monitoring Committee. To ensure ownership by the relevant actors, it is crucial to involve all local authorities and stakeholders concerned, including social partners, throughout the implementation of the investments and reforms included in the plan.

Positive assessment

(43)Following the positive assessment of the Commission concerning Latvia’s recovery and resilience plan with the finding that the plan satisfactorily complies with the criteria for assessment set out in Regulation (EU) 2021/241, in accordance with Article 20(2) and Annex V to that Regulation, this Decision should set out the reforms and investment projects necessary for the implementation of the plan, the relevant milestones, targets and indicators, and the amount made available from the Union for the implementation of the plan in the form of non-repayable financial support.

Financial contribution

(44)The estimated total cost of the recovery and resilience plan of Latvia is EUR 1 826 000 000. As the recovery and resilience plan satisfactorily complies with the criteria for assessment set out in Regulation (EU) 2021/241 and, furthermore, as the amount of the estimated total costs of the recovery and resilience plan is lower than the maximum financial contribution available for Latvia, the financial contribution allocated for Latvia’s recovery and resilience plan should be equal to the amount of the estimated total costs of the recovery and resilience plan without prejudice to an update of the plan taking into account the maximum financial contribution in accordance with Article 18(2) of that Regulation.

(45)In accordance with Article 11(2) of Regulation (EU) 2021/241, the calculation of the maximum financial contribution for Latvia is to be updated by 30 June 2022. As such, in accordance with Article 23(1) of that Regulation, an amount for Latvia should be made available now for a legal commitment by 31 December 2022. Where necessary following the updated maximum financial contribution, the Council, on a proposal from the Commission, should amend this Decision to include the updated maximum financial contribution without undue delay.

(46)The support to be provided is to be financed from the borrowing by the Commission on behalf of the Union on the basis of Article 5 of Council Decision (EU, Euratom) 2020/2053 6 . The support should be paid in instalments once Latvia has satisfactorily fulfilled the relevant milestones and targets identified in relation to the implementation of the recovery and resilience plan.

(47)Latvia has requested pre-financing of 13 % of the financial contribution. That amount should be made available to Latvia subject to the entry into force and in accordance with the Financing Agreement provided for in Article 23(1) of Regulation (EU) 2021/241.

(48)This Decision should be without prejudice to the outcome of any procedures relating to the award of Union funds under any other Union programme than Regulation (EU) 2021/241 or to procedures relating to distortions of the operation of the internal market that may be undertaken, in particular under Articles 107 and 108 of the Treaty. It does not override the requirement for Member States to notify instances of potential State aid to the Commission under Article 108 of the Treaty,

HAS ADOPTED THIS DECISION:

Article 1
Approval of the assessment of the recovery and resilience plan

The assessment of the recovery and resilience plan of Latvia on the basis of the criteria provided for by Article 19(3) of Regulation (EU) 2021/241 is approved. The reforms and investment projects under the recovery and resilience plan, the arrangements and timetable for monitoring and implementation of the recovery and resilience plan, including the relevant milestones and targets, the relevant indicators relating to the fulfilment of the envisaged milestones and targets, and the arrangements for providing full access by the Commission to the underlying relevant data are set out in the Annex to this Decision.

Article 2
Financial contribution

1.The Union shall make available to Latvia a financial contribution in the form of non-repayable support amounting to EUR 1 826 000 000. An amount of EUR 1 640 779 642 shall be available to be legally committed by 31 December 2022 7 . Subject to the update provided for in Article 11(2) of Regulation (EU) 2021/241 calculating an amount for Latvia equal to or more than this amount, a further amount of EUR 185 220 358 shall be available to be legally committed from 1 January 2023 until 31 December 2023.

2.The Union financial contribution shall be made available by the Commission to Latvia in instalments in accordance with the Annex. An amount of EUR 237 380 000 shall be made available as a pre-financing payment, equal to 13 % of the financial contribution. The pre-financing and instalments may be disbursed by the Commission in one or several tranches. The size of the tranches shall be subject to the availability of funding.

3.The pre-financing shall be released subject to the entry into force and in accordance with the Financing Agreement provided for in Article 23(1) of Regulation (EU) 2021/241. Pre-financing shall be cleared by being proportionally deducted against the payment of the instalments.

4.The release of instalments in accordance with the Financing Agreement shall be conditional on available funding and a decision by the Commission, taken in accordance with Article 24 of Regulation (EU) 2021/241, that Latvia has satisfactorily fulfilled the relevant milestones and targets identified in relation to the implementation of the recovery and resilience plan. Subject to the entry into force of the legal commitments referred to in paragraph 1, to be eligible for payment, milestones and targets shall be completed no later than 31 August 2026.

Article 3
Addressee

This Decision is addressed to the Republic of Latvia.

Done at Brussels,

(1)    OJ L 57, 18.2.2021, p. 17-75.

(2)    Pending final adoption by the Council, after endorsement by the European Council. The text agreed by the Eurogroup on 16 December 2020 is available at: https://data.consilium.europa.eu/doc/document/ST-14356-2020-INIT/en/pdf

(3)    Council Regulation (EU) 2020/2094 of 14 December 2020 establishing a European Union Recovery Instrument to support the recovery in the aftermath of the COVID-19 crisis (OJ L 433I , 22.12.2020, p. 23.)

(4)    Such simulations reflect the overall impact of NGEU, which also includes funding for ReactEU, and increased funding for Horizon, InvestEU, JTF, Rural Development and RescEU. Such simulations do not include the possible positive impact of structural reforms, which can be substantial.

(5)    Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13).

(6)    OJ L 424, 15.12.2020, p. 1.

(7)    This amount corresponds to the amount available for legal commitment by 31 December 2022 after deduction of the Latvia’s proportional share of the expenses of Article 6(2) of Regulation (EU) 2021/241, calculated in accordance with the methodology of Article 11 of that Regulation.

EUROPEAN COMMISSION

Brussels, 22.6.2021

COM(2021) 340 final

ANNEX

to the

Proposal for a Council Implementing Decision

on the approval of the assessment of the recovery and resilience plan for Latvia

{SWD(2021) 162 final}

ANNEX

SECTION 1: REFORMS AND INVESTMENTS UNDER THE RECOVERY AND RESILIENCE PLAN

1.Description of Reforms and Investments

A. COMPONENT 1: CLIMATE CHANGE AND ENVIRONMENTAL SUSTAINABILITY

The general objective of this component of the Latvian recovery and resilience plan is to contribute to the green transition and notably contribute to the environmental objectives of climate change mitigation and climate adaptation. Each sub-component focuses on some of the challenges of the green transition. Subcomponent 1.1 focuses on sustainable mobility with a view to decrease emissions in the transport sector, especially in Riga and its periphery by investing in clean public transport (notably railway) infrastructure. Subcomponent 1.2 mainly targets increasing energy efficiency by supporting various energy renovation programmes in public and private buildings and supporting sustainable energy networks. Lastly, subcomponent 1.3 contributes to climate adaptation by preventing climate change related risks such as fires and floods.

The component supports addressing the Country-Specific Recommendations on transport notably on its sustainability, energy efficiency and energy interconnections (Country Specific Recommendation 3, 2019). It also contributes to front-loading mature public investment projects and focusing on the green and digital transition, in particular clean and efficient production and use of energy, sustainable transport infrastructure (Country Specific Recommendation 3, 2020).

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

A.1.    Description of the reforms and investments for non-repayable financial support

Reform: 1.1.1 Greening the Riga Metropolitan Transport System

The general objective of the measure is to contribute to reduce Latvia’s greenhouse gas (GHG) emissions with a focus on transport which represents the biggest source of GHG emissions (28,5 % share of total GHG emissions (excluding land use, land-use change and forestry) in 2018 and 36,7 % of non-ETS GHG emissions). This measure specifically focuses on the Riga metropolitan area which covers about 65% of the Latvian population. A specific objective is to consolidate and rationalise the currently fragmented transport system to incentivise the use of public transportation.

The measure consists in a general overhaul of the Riga Metropolitan Transport System. A multimodal public transport network with a single and coherent timetable, a single price and discount policy and a single ticket system shall be created. The measure shall also include a substantial investment programme in clean mobility and infrastructure with a focus on railway solutions (electrification of 81 km of railway) and zero-emission public transport (acquisition of four low-floor trams, 17 electric buses and seven electric bus charging stations, construction of cycle lanes). This shall be completed by the construction of environmentally-friendly mobility nodes (six regional and two local mobility points), of an independent high-speed transport line devoted to public transport and the extension of the tram line by 3.5 km, to support multimodal transport use.

The measure shall be implemented by 31 August 2026.

Investment: 1.2.1.1.i.I. Improving the energy efficiency of multi-apartment buildings and transition to renewable energy technologies

The general objective of this measure is to improve the energy efficiency of buildings. As energy consumed in the buildings sector accounts for up to 40 % of the final energy consumption, the measure is expected to reduce the impact on the environment and contribute to climate change mitigation. Another aim is to reduce energy bills for inhabitants and increase the level of security of energy supply. Other specific objectives include reducing the level of energy poverty and supporting employment. This measure specifically focuses on multi-apartment buildings.

The measure consists of a support programme for energy renovation in multi-apartment buildings. It shall take the form of a financial instrument (loan) with a capital discount of up to 49 % of the amount of the loan. Aid shall only be available for buildings where the project is expected to achieve at least 30 % energy savings.

The measure shall be implemented from 1 September 2021 until 31 August 2026.

Investment: 1.2.1.2.i. Increasing energy efficiency in business, in the form of a combined financial instrument

The general objective of this measure is to improve the energy efficiency of Latvian businesses. Investments in the energy efficiency of businesses aim to promote a rationalised use of energy resources, reduce negative impacts on the environment and climate, as well as improve the productivity, competitiveness and export capacity of enterprises. This measure specifically focuses on businesses.

The first pillar of the measure consists in a support programme in the form of a combined financial instrument (loan with a grant in the form of a capital discount). The investment programme shall finance investments by enterprises in improving energy efficiency, introducing renewable energy technologies and related research and development activities, carrying out energy audits, as well as investing in sustainable transport and introducing new energy-efficient technologies in production. A second pillar of the measure shall consist in grants for the development (through industrial research, experimental development, feasibility studies) of new products and technologies related to the low carbon economy, climate resilience and adaptation.

The measure shall be implemented from 1 January 2022 until 31 August 2026.

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for upcoming calls for projects shall exclude the following list of activities: (i) activities related to fossil fuels, including downstream use 1 ; (ii) activities under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks 2 ; (iii) activities related to waste landfills, incinerators 3 and mechanical biological treatment plants 4 ; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation may be selected.

Investment: 1.2.1.3.i.I. Improving municipal buildings and infrastructure by promoting the transition to renewable energy technologies and improving energy efficiency

The general objective of this measure it to improve the energy efficiency of Latvian municipal buildings. A large part of existing municipal buildings had been built before thermal requirements for building were increased and therefore have a low energy performance. More specifically, the objective of the measure is to improve the energy efficiency of local government buildings and infrastructure in order to reduce annual primary energy consumption and reduce GHG emissions. As a complementary objective, this measure is also expected to reduce the cost of maintenance of municipal buildings.

The measure consists of investments in energy efficiency renovation in buildings owned by local government (and mixed properties where the municipalities are majority shareholders), including buildings dedicated to social housing, health care, education and social services.

The measure shall be implemented from 1 January 2022 until 31 December 2025.

Investment: 1.2.1.4.i.I. Improving the energy efficiency of public sector buildings, including historical buildings

The general objective of this measure is to improve the energy efficiency of the Latvian public building stock. It applies to buildings owned by the central government including historical and judicial ones. The measure seeks to improve their energy efficiency, promote the transition to renewable energy in energy production, and achieve GHG emission reductions.

The measure consists of investment in energy efficiency improvements for public buildings. The aid shall ensure that the implementation of all projects shall, on average, result in at least 30 % energy savings under the programme.

The measure shall be implemented from 1 January 2022 until 31 August 2026.

Investment: 1.2.1.5.i. Modernisation of electricity transmission and distribution networks

The general objective of this measure is to contribute to reaching climate neutrality objectives by creating a sustainable grid infrastructure in which green technologies notably wind may be more easily deployed. Investments in the green transformation of electricity grids and digital infrastructure are necessary to provide adequate electricity supply infrastructure for electro-mobility, and sustainable and efficient system operation. The measure is also expected to contribute to the synchronisation of the Baltic electricity systems with continental European networks and the objectives and activities of the Baltic Electricity Market Integration Plan.

The measure consists of direct investment in upgrading the electricity grid, developing IT solutions to increase the flexibility and security of the transmission system and distribution system and creating among others a national electricity market data exchange and storage platform and an automated smart metering system. The measure shall also improve the regulatory framework and the enabling conditions to facilitate the deployment of onshore wind energy on state forest land and to reduce legal uncertainty for investments in wind power. The measure shall be implemented from 1 January 2022 until 31 August 2026.

Reform: 1.3.1.r. Disaster management system adaptation to climate change, rescue and rapid response services

The general objective of this measure is to contribute to climate objectives by strengthening the response capacity of disaster and fire rescue services. The measure shall contribute to climate adaptation by shortening the response time of fire rescue services (in the framework of a more general reform integrating different services of the Ministry of the Interior under one roof). The measure is also expected to contribute to climate mitigation by moving these services to new energy efficient buildings.

The measure consists of the construction of eight new energy-efficient disaster management centres.

The measure shall be implemented from 1 January 2022 until 31 March 2026.

Investment: 1.3.1.2.i. Investments in flood risk reduction infrastructure

The general objective of this measure is to contribute to climate change adaptation by preventing floods. It shall lead to renovate constructions that protect more than 59 000 ha from flood risks.

The measure consists of investments in flood risk reduction infrastructure, including the rehabilitation of polder pumping stations, the restoration of protective dikes and the restoration of regulated sections of rivers.

The measure shall be implemented from 1 January 2022 until 31 August 2026.

A.2.    Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

B. COMPONENT 2: DIGITAL TRANSFORMATION

The component addresses the main digital challenges - a lack of basic and advanced digital skills and low digital integration of the businesses. Moreover, the component addresses all the aspects of the digital transformation - public and private sector, skills and connectivity. The main focus of the investments is in infrastructure and services.

The objectives of the component are to contribute to the digital transformation of the society and economy, including the recovery from the COVID-19 crisis, by developing the necessary infrastructure, capacities and skills; improve efficiency, digital processes, and data management in public administration; provide support to the digital transformation of businesses and improve connectivity.

The component addresses the Country Specific Recommendations on skills and adult learning (Country Specific Recommendation 2, 2019, Country Specific Recommendation 2, 2020). In particular, it shall contribute to increasing the quality and efficiency of education and training with a focus on digital skills. Reskilling and upskilling measures for workers and unemployed are included, albeit without targeting low-skilled (Country Specific Recommendation 2, 2019). Investments in digital transition address the investment related Country Specific Recommendations (Country Specific Recommendations 3, 2019 and 3, 2020) - investments are envisaged in public sector IT systems, basic and advanced digital skills, digital adaptation of businesses, and connectivity.

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

B.1.    Description of the reforms and investments for non-repayable financial support

Reform: 2.1.1r Modernisation of national processes and services and digital transformation

The objective of the measure is to modernise public administration and its services by digital transformation, focusing on important functions, processes and services of the public administration that have not yet been digitally transformed, are being newly developed or substantially strengthened. The second pillar consists of modernisation measures, which are linked to the processing of essential public administration datasets and thus pave the way for the implementation of the data management reform.

The reform consists of building the common ICT conceptual architecture for public administration services and their management support, defining qualitative and quantitative metrics of services. The implementation of the reform shall be coordinated and managed by the national ICT governance organisation, while the implementation of the specific tasks of implementing the reform shall be carried out by the authority responsible for each task.

The reform shall be implemented by 30 June 2022.

Investment: 2.1.1.1i. Administration modernisation and digital transformation of services, including business environment

The objectives of the measure are to transform public administration services and their delivery processes for the effective implementation of the digital transformation of the economy. It shall be done through the use of innovative technologies and approaches, including artificial intelligence and machine learning solutions, as well as by introducing a data-based foresight and decision-making approach to service and process management and ensuring the full implementation of the ‘once-only’ principle.

The measure consists of investments in 11 individual systems or solutions: 1) digital elements of the elections processes; 2) civil protection and fire safety supervision processes; 3) public security monitoring processes; 4) library, museums and culture monuments protection processes; 5) information space monitoring processes; 6) public media sustainability processes; 7) veterinary medicinal products registration processes; 8) transportation and logistics data processing in ports; 9) Business register data processing; 10) taxation data processing; and 11) public procurement data processing.

The investment shall be implemented by 31 August 2026.

Reform: 2.1.2.r Increasing efficiency and interoperability in the use of national ICT resources

The objectives of the reform are to transform the ICT provision approach in public administration by centralising the provision of uniform ICT sharing services in competence centres that support several institutions.

The reform consists of the development of central systems and platforms of public administration and consolidation of computing infrastructure services, enabling the automation and efficiency of the processes of supply, ensure cross-border access to public administration services, and consolidation of public administration computing and data storage infrastructure services.

The reform shall be implemented by 30 June 2022.

Investment: 2.1.2.1.i. Centralised governance platforms and systems

The objective of the investment is to ensure the functioning of the administration as a single organisation, which would include the introduction of standardised support functions such as accounting, staff administration, resource accounting and management.

The investment consists of four public services delivery platforms, five departmental and support functions platforms; and six platforms and systems for the municipalities.

The investment shall be implemented from 1 April 2022 until 31 August 2026.

Investment: 2.1.2.2i. National Federal Cloud of Latvia

The objectives of the investment are to provide shared computing and data management infrastructure and its services for the public administration, and developing the ICT infrastructure competence centres for storage and computing (Latvian Federal Cloud nodes).

The investment consists of the establishment of the Latvian Federal Cloud, which provides for consolidation of public sector data storage and computing capabilities within a co-ordinated project. Initially, it consists of integrating four shared services providers - Latvia Radio and Television centre, National Library of Latvia, Ministry of Interior Affairs Information Centre and Ministry of Agriculture into the national federated cloud. Altogether three public services delivery platforms and services and seven department and support functions platforms shall be integrated into national federated cloud b.

The investment shall be implemented by 31 August 2026.

Reform: 2.1.3 Development of the national economy data and digital services economy

The objective of the reform is to ensure the availability and sharing of public and private data and services by laying the foundations for the development and interoperability of the data and platform economy with European data spaces and by ensuring data sharing within the EU.

The reform consists of developing the capacities of the public sector to collect and handle data and establishing appropriate governance principles to ensure a one-stop-shop approach for data exchange between sectors and European data spaces.

The reform shall be implemented by 31 December 2023.

Investment: 2.1.3.1.i. Data availability, sharing and analysis

The objectives of the investment are to promote data sharing within the public sector and between the public and private sectors, the introduction of the one-off principle and the sharing of data in the national and European area.

The investment consists of creating high availability data loading and recovery solutions and a set of data objects from the education, business, citizenship and identity documents sectors (by 2023), and from social insurance and safety; land and real estate; and taxes sectors (by 2026).

The investment shall be implemented by 31 August 2026.

Reform: 2.2.1.r Creation of the full cycle of business digital transformation support with regional coverage

The objectives of the reform are to establish European Digital Innovation Hub (EDIH), ensure its regional presence through regional contact points, and to create a single and coordinated support ecosystem to facilitate the digital transformation of commercial activities.

The reform consists of establishing EDIH, a single platform/ecosystem supporting digital transformation as a one-stop-shop, establishing a digital maturity test system; ensuring the regional contact points provide the following new digital transformation support functions: digital maturity tests in regions; access to testing and piloting; mentoring and digital skills training.

The reform shall be implemented by 30 September 2022.

Investment: 2.2.1.1i. Support for the establishment of Digital Innovation Hubs and regional contact points

The objective of the investment is to enhance digital transformation of business through offering tailored support measures based on identified digitalisation needs of companies.

The investment consists of providing companies with a digital maturity test; training company representatives, identifying the investment and infrastructure needs and promoting international visibility.

The investment shall be implemented by 30 June 2026.

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for upcoming calls for projects shall exclude the following list of activities: (i) activities related to fossil fuels, including downstream use 5 ; (ii) activities under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks 6 ; (iii) activities related to waste landfills, incinerators 7 and mechanical biological treatment plants 8 ; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation can be selected.

Investment: 2.2.1.2.i. Support for the digitisation of processes in commercial activities

The objectives of the investment are to promote increased productivity through targeted investment of resources, and to create higher added value in the business processes.

The investment consists of a grant scheme for digitisation of the processes and functions in enterprises. Support may be granted for acquisition of IT solutions, both software and hardware, acquisition of sensors, purchase of IT equipment, IT infrastructure, implementing digital integration processes.

The investment shall be implemented by 30 June 2026.

Investment: 2.2.1.3.i. Support for the introduction of new products and services into business

The objective of the investment is to promote the creation of new high-tech digital products and services.

The investment consists of a grant scheme for the introduction of modern automation, robotisation and labour control tools in the manufacturing and service development processes, as well as to support the introduction of personalized e-commerce solutions. Supported activities for new digital products and services include feasibility studies; industrial research; experimental development, including prototyping; and support to projects under Digital Europe programme.

The investment shall be implemented by 30 June 2026.

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for upcoming calls for projects shall exclude the following list of activities: (i) activities related to fossil fuels, including downstream use 9 ; (ii) activities under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks 10 ; (iii) activities related to waste landfills, incinerators 11 and mechanical biological treatment plants 12 ; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation can be selected.

Investment: 2.2.1.4i. Financial instruments to facilitate the digital transformation of economic operators

The objectives of the investment are to boost the productivity and production process efficiency for maximum returns by supporting large-scale and productivity-oriented investments in digital transformation tools. The investments shall facilitate the introduction of Industry 4.0 solutions into production processes.

The investment consists of a financial instrument scheme providing loans with grant elements for making significant changes to the overall production or service development process, to digitalise traditional processes in companies, introduce Industry 4.0 solutions (internet of things, artificial intelligence, machine learning, block chain, big data, cloud computing high performance computing) for the core business of companies.

The investment shall be implemented by 30 June 2026.

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for upcoming calls for projects shall exclude the following list of activities: (i) activities related to fossil fuels, including downstream use 13 ; (ii) activities under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks 14 ; (iii) activities related to waste landfills, incinerators 15 and mechanical biological treatment plants 16 ; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation can be selected.

Investment: 2.2.1.5i. Fostering the digital transformation of media companies

The objectives of the investment are to facilitate the digital transformation of the media sector and to facilitate the adaptation of media companies to modern media consumption trends in the digital environment.

The investment consists of a support scheme for investments in the development of technological solutions and improving digital skills and business models in the media sector.

The investment shall be implemented by 30 June 2026.

Reform: 2.3.1.r. Development of a sustainable and socially responsible support framework for adult learning

The objectives of the reform are to increase the adult learning participation rate to 8% (adults aged 25-64) by 31 December 2025 and facilitate reaching other targets set in the Education Development Guidelines 2021-2027. The reform shall establish and strengthen the legal framework for a sustainable and socially responsible support system for adult learning; encourage enterprises (especially SMEs) to provide their employees with opportunities to improve their skills and competences; and create more opportunities and rights for employees to participate in education.

The reform consists of the set of policy development milestones fixed in the Education Development Guidelines 2021-2027 coming into force; setting responsibilities of enterprises for education of their employees; setting up and piloting individual learning accounts; and piloting three skills funds.

The reform shall be implemented by 30 June 2026.

Investment: 2.3.1.1.i.: Ensuring the acquisition of advanced digital skills

The objectives of the investment are to significantly increase the number of specialists with high-level digital skills (DESI levels 3-5) that are able to apply high technology knowledge and technology-intensive new products and services to the development of new products and services in different sectors in the next six years.

The investment consists of developing approximately 20 advanced digital skills training modules in quantum technologies, HPC and language technologies to be included in formal and adult education programmes.

The investment shall be implemented by 31 August 2026.

Investment: 2.3.1.2.i. Development of digital skills of enterprises

The objectives of the investment are to increase the level of digital skills in companies.

The investment consists of provision of basic, medium and high-level digital skills trainings by the European Digital Innovation Hubs in cooperation with sectoral associations, educational institutions and involving the existing Regional Business Centres.

The investment shall be implemented by 30 June 2024 for the provision of training of digital skills mentors and by 30 June 2026 for the provision of digital skills trainings for employees in 3000 enterprises.  

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for upcoming calls for projects shall exclude the following list of activities: (i) activities related to fossil fuels, including downstream use 17 ; (ii) activities under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks 18 ; (iii) activities related to waste landfills, incinerators 19 and mechanical biological treatment plants 20 ; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation can be selected.

Investment: 2.3.1.3.i Development of a self-managed training approach for ICT specialists

The objectives of the investment are to develop a new approach for the preparation of ICT specialists, creating a learning environment for self-managed ICT learning school to increase the share of ICT specialists, including women in the structure of employees.

The investment consists of the development of a learning environment for self-managed ICT training and provision of training for at least 1000 professionals in self-managed ICT training.

The investment shall be implemented by 31 August 2026.

Investment: 2.3.1.4.Development of the individual learning account approach

The objectives of the investment are to develop and approve the concept of individual learning accounts (ILAs) in order to stimulate adult participation in education, in particular improving digital skills.

The investment consists of supporting 3500 adults to acquire digital skills through individual learning accounts. This shall be implemented by making available the best digital learning tools; using specialised solutions for high-quality machine translation and other artificial intelligence technologies, involving education experts in the validation and adaptation of localised content.

The investment shall be implemented by 31 August 2026.

Reform: 2.3.r Digital skills for the digital transformation of society and government

The objective of the reform is to achieve at least basic digital skills level for 54% of inhabitants aged 16-74.

The reform consists of a development of the common framework for the assessment of basic digital skills, the identification and planning of training needs and the assessment.

The reform shall be implemented by 31 December 2022 in relation to setting up the framework, 31 December 2022 for amending higher education standards and 31 August 2026 for reaching digital upskilling targets.

Investment: 2.3.2.1.i Digital skills for citizens, including young people

The objectives of the investment are providing support measures for the acquisition of digital skills for citizens from all groups of society, especially youth; introduction of a systemic approach in municipalities for the development of digital skills; development of digital and technological literacy of young people outside formal education.

The investment consists of the development of digital self-service skills e-learning courses; provision of self-training and other digital training measures at local level; technological innovation activities in line with Joint Technology Creativity Guidelines for the development of youth technology and innovation capacity; municipalities programmes for the youth.. The investment aims to provide basic digital skills for at least 50 000 people, and complete digital skills programmes for youth in all 42 municipalities.

The investment shall be implemented by 31 December 2024 for e-learning course development; trainings, technological innovation activities and municipality programmes shall be implemented by 31 August 2026.

Investment: 2.3.2.2.i. Development of state and local government digital transformation skills and capabilities

The objectives of the investment are to increase the skills of employees of public administration in digital transformation and their use of technologies, in order to develop policies fit for the digital age.

The investment consists of increasing the digital competence and capacity of national government and local government employees, including digital transformation planning and change management, use of data analytics, artificial intelligence and other modern technologies to modernise operations and services, flexible ICT project management, use of modern digital infrastructures and management.

The investment shall be implemented by 30 June 2023 for digital skills and competence framework and by 31 August 2026 for improving the digital skills for public administration employees.

Investment: 2.3.2.3i. Closing the digital divide for socially vulnerable learners and educational institutions

The objectives of the investment are to provide access to learning content and allow participating in remote learning process for the pupils from socially vulnerable groups. A framework for organisation and implementation of remote learning in educational institutions will be approved by end of 2021.

The investment consists of purchasing information and communication technology equipment for general education institutions, with targeted support for pupils from socially vulnerable groups, teachers and the creation of a “computer library” in educational institutions. The investment shall be implemented by 31 December 2023.

Reform 2.4.1r. Broadband infrastructure development

The objectives of the reform is to promote connected automated driving and supporting sustainable mobility, including by improving road safety through innovation.

The reform consists of the adoption of technical requirements for connected and automated driving, and the adoption of a common model for the development of the last mile.

The reform shall be implemented by 31 December 2021.

Investment: 2.4.1.1.i. Construction of the Passive Infrastructure on the Via Baltica Corridor for 5G coverage

The objective of the investment is the deployment of the 5G corridor in line with the 5G Action Plan for Europe, with an initial focus on Via Baltica as a pilot project to develop other road sections in the future.

The investment consists of building passive infrastructure in the Via Baltica corridor for 5G coverage, taking into account the identified investment gap and the needs of electronic communications enterprises. At a later stage of development, private investment is expected to deploy active infrastructure and provide ‘last mile’ services, including in synergy with Connecting Europe Facility.

The investment shall be implemented by 31 December 2025.

Investment: 2.4.1.2i.Broadband or very high capacity network “last mile” infrastructure development

The objectives of the investment are to create opportunities for regional development and stimulate demand for new digital services.

The investment consists of providing 1500 households, businesses and socio-economic drivers with access to very high capacity broadband network.

The investment shall be implemented by 31 December 2025.

B.2.    Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

Sequential Number	Related Measure (Reform or Investment)	Milestone / Target	Name	Qualitative indicators (for milestones)	Quantitative indicators (for targets)			Indicative timeline for completion		Description of each milestone and target
					Unit of measure	Baseline	Goal	Quarter	Year
27	2.1.1 Modernisation of national processes and services and digital transformation	Milestone	Establishment of a framework for unified governance management of ICT development activities in public administration	Entry into force of the legal framework	N/A	N/A	N/A	Q1	2022	Regulations of the Cabinet of Ministers laying down common procedures for monitoring ICT development activities entered into force. For the new regulations to be applicable for all ICT development activities within the scope of the measures of the Latvian recovery and resilience plan (including municipalities), the scope of the Law of State Information Systems Law shall be extended. If adoption of the amendments to the law are delayed, temporary regulation to supplement specific normative framework for specific regulations for respective ICT project activities issued.
28	2.1.1 Modernisation of national processes and services and digital transformation	Milestone	Establishment of a normative framework for receiving support in the field of digital transformation of public administration processes and services	Entry into force of the legal framework	N/A	N/A	N/A	Q2	2022	Cabinet of Ministers regulation entered into force for granting support in the field of digital transformation of public administration processes and services
29	2.1.1.1i. Administration modernisation and digital transformation of services, including business environment	Target	Descriptions of ICT solutions development activities developed and harmonised		Number	0	11	Q3	2023	The ICT solutions (systems) concept models shall be developed in accordance with the adopted legal framework for ICT governance. Descriptions define ICT development activities to develop or modernize ICT solutions in the following areas : 1) digitally transformed elements of the elections processes; 2) civil protection and fire safety supervision processes; 3) public security monitoring processes; 4) library, museums and culture monuments protection processes; 5) information space monitoring processes; 6) public media sustainability processes; 7) veterinary medicinal products registration processes; 8) transportation and logistics data processing in ports; 9) Business register data processing; 10) taxation data processing; 11) public procurement data processing and analysis.
30	2.1.1.1i. Administration modernisation and digital transformation of services, including business environment	Target	Delivery of ICT solutions for modernised public administration functions (including systems)		Number	0	11	Q3	2026	The public administration function shall be modernised with the following ICT solutions and systems fully operational: 1) digitally transformed elements of the elections processes; 2) civil protection and fire safety supervision processes; 3) public security monitoring processes; 4) library, museums and culture monuments protection processes; 5) information space monitoring processes; 6) public media sustainability processes; 7) veterinary medicinal products registration processes; 8) transportation and logistics data processing in ports; 9) Business register data processing; 10) taxation data processing; 11) public procurement data processing and analysis.
31	2.1.r. Increasing efficiency and interoperability in the use of national ICT resources	Milestone	Establishment of the legal framework for receiving support in the area of development of central systems and platforms of public administration and consolidation of computing infrastructure services	Entry into force of the legal framework	N/A	N/A	N/A	Q2	2022	Entry into force of the legal framework for granting support in the area of development of central IT systems and platforms of public administration and consolidation of computing infrastructure services
32	2.1.2.1i. Centralised governance platforms and systems	Target	Approval of coordinated plans for the creation, transformation or deployment of centralised functions or services		Number	0	15	Q1	2023	Before the start of the activity, to develop ICT solutions, the responsible institution shall prepare and coordinate approval of the centralised ICT function or service development plan (including with regard to the financing of services)
33	2.1.2.1i. Centralised governance platforms and systems	Target	Adoption of harmonised descriptions of the development activities of centralised ICT solutions		Number	0	15	Q3	2023	The central platform or system developer shall develop and harmonise the conceptions of the development activities of the ICT solutions to be developed in accordance with the legal framework for ICT governance.
34	2.1.2.1i. Centralised governance platforms and systems	Target	Number of centralised ICT platforms and systems set up and in operation		Number	0	15	Q3	2026	The following centralised ICT platforms or systems set up shall be in operation: 1) public services delivery platforms - 4; 2) departmental and support functions platforms - 5; 3) platforms and systems for the municipalities - 6.
35	2.1.2.2i. National Federal Cloud of Latvia	Target	Number of shared service providers integrated in the national federated cloud – cloud solutions		Number	0	4	Q4	2024	The performance indicator shall be considered to be fulfilled when four shared services providers (Latvia Radio and Television centre, National Library of Latvia, Ministry of Interior Affairs Information Centre, Ministry of Agriculture) are integrated into the national federated cloud, ensuring interoperability at least at the level of mutual backup recovery and provisioning of extra computing capacity.
36	2.1.2.2i. National Federal Cloud of Latvia	Target	Public administration information systems modified to modern IS architecture and hosted in the national federated cloud		Number	0	10	Q3	2026	The target shall be fulfilled when ten public administration systems or platforms are built or modified to be compliant with the requirements of a modular and interoperable ICT architecture and effectively use the services of the national federated cloud. Systems or platforms using the national federated cloud: 1) public services delivery platforms and services – 3 (indicative list: digital delivery platform Latvija.lv, data aggregator, subsidies management platform); 2) departmental and support functions platforms - 7 (indicative list: Resources management platform VIRSIS, Project management platform MAP, Environmental data management platform, Exporters platform, Administrative process platform, Systems in areas of Health and Welfare).
37	2.1.3 Development of the national economic data and digital services economy	Milestone	Entry into force of the normative framework for receiving support in the field of transformation of economic data management	Entry into force of the legal framework	N/A	N/A	N/A	Q2	2022	Entry into force of the Legal framework for granting support in the field of transformation of economic data management harmonised by the Cabinet of Ministers
38	2.1.3 Development of the national economic data and digital services economy	Milestone	Legal framework for the functioning of the national platform for the circulation of data	Entry into force of the legal framework	N/A	N/A	N/A	Q4	2023	The successful implementation of the reform shall be ensured by entry into force of the legal framework specifying the following aspects of the national platform: 1.data sharing management, including the data exchange process in the central data exchange platform; 2.the rights and duties of the participating institutions for the sharing and circulation of data within the central data exchange platform, 3.uniformed and facilitated processing of personal data within the central data exchange platform.
39	2.1.3.1.i. Data availability, sharing and analysis	Target	Sectors for which relevant datasets are available on the national data circulation platform (data aggregations in the environment)		Number	0	6	Q3	2026	The data aggregation environment shall provide a high availability data loading/recovery solution and provides a set of data objects from the following sectors: 1) Education; business; citizenship and identity documents by 2023; 2) Social insurance and safety; land and real estate; taxes by 2026.
40	2.2.r. Creating the full cycle of business digital transformation support with regional coverage	Milestone	The European Digital Innovation Hub (EDIH) has been established	The European Digital Innovation Hub (EDIH) has been established.	N/A	N/A	N/A	Q2	2022	The EDIH shall be fully in operation in line with the Digital Europe Programme priorities and form part of the network of a common European Digital Innovation Hub. It shall serve as a one-stop shop for the coordination of the digital transformation of businesses. (Provides a common approach and exchange of information between Regional Business Centres, the Digital Maturity Test.
41	2.2.r. Creating the full cycle of business digital transformation support with regional coverage	Milestone	Regional business support centres provide new digital transformation support functions	Regional business support centres provide digital transformation support functions	N/A	N/A	N/A	Q3	2022	The regional business support centres shall have started providing the following new digital transformation support functions: 1.Digital maturity tests in regions; 2.Access to testing and piloting; 3. Mentoring and digital skills training.
42	2.2.r. Creating the full cycle of business digital transformation support with regional coverage	Milestone	Establishment of a digital maturity test system for companies to identify the actions needed by companies and state support.	Digital maturity test system in place	N/A	N/A	N/A	Q2	2022	The digital maturity test is a digital tool available on the EDIH website, which assesses a company’s digital maturity in various aspects and may be filled by the company independently or with the help of a consultant.
43	2.2.1.1i. Support for the establishment of Digital Innovation Hubs and Regional Contact Points	Target	Number of companies supported by the European Digital Innovation Centre	N/A	Supported economic operators	0	3500	Q2	2024	Number of companies having received non-financial support (digital maturity test and mentoring to create a digital transformation path map) from the EDIH. The selection criteria shall ensure that the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation.
44	2.2.1.1i. Support for the establishment of Digital Innovation Hubs and Regional Contact Points	Target	Number of companies supported by the European Digital Innovation Hub (EDIH)	N/A	Supported economic operators	0	7000	Q2	2026	Number of companies having received non-financial support (digital maturity test and mentoring to create a digital transformation path map). The selection criteria shall ensure that the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation.
45	2.2.1.2i. Support for the digitisation of processes in commercial activities	Target	Number of companies supported to digitise processes in commercial activity and for which the result of the digital maturity test improved, against the previous test result, after receipt of the grant and realisation of the project		Supported economic operators/projects	0	80	Q2	2024	The target shall be executed when a contract has been concluded between the company and the EDIH for the receipt of the grant and improvements to the test result are observed in the repeated Digital Maturity Test.
46	2.2.1.2i. Support for the digitisation of processes in commercial activities	Target	Number of companies supported to digitise processes in commercial activity and for which the digital maturity test result improved, against the previous test result, after receipt of the grant and realisation of the project		Supported economic operators/projects	0	200	Q2	2026	The target shall be executed when a contract has been concluded between the company and the EDIH for the receipt of the grant and improvements to the test result are observed in the repeated Digital Maturity Test.
47	2.2.1.3i. Aid for business introduction of new products and services	Target	Number of projects supported	N/a	Supported economic operators/projects	0	14 Economic Operators	Q2	2024	Number of contracts awarding grants by the CFCA for completed investments paid, the amount of one grant is expected to be up to EUR 1000000. The selection criteria shall ensure that the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation.
48	2.2.1.3i. Aid for business introduction of new products and services	Target	Number of projects supported	N/A	Supported economic operators/projects	0	43	Q2	2026	Number of contracts awarding grants by the CFCA for completed investments paid, the amount of one grant is expected to be up to EUR 1000000. The selection criteria shall ensure that the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation.
49	2.2.1.3i. Aid for business introduction of new products and services	Target	Private finance attracted	N/A	EUR		4860000	Q2	2026	Attracted private financing from enterprises for introduction of new products and services
50	2.2.1.4i. Financial instruments to facilitate the digital transformation of economic operators	Target	Number of loans granted	N/A	Supported economic operators/projects	0	51	Q2	2024	Number of loans granted by Altum or with a grant element (payment of a loan or grant) under the programme for the digital transformation of economic operators. The performance indicator is deemed to have been fulfilled when a contract has been concluded between the economic operator and Altum for the execution of the project. The selection criteria shall ensure that the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation.
51	2.2.1.4i. Financial instruments to facilitate the digital transformation of economic operators	Target	Number of loans granted	N/A	Supported economic operators/projects	0	133	Q2	2026	Number of loans granted by Altum or with a grant element (payment of a loan or grant) under the programme for the digital transformation of economic operators. The performance indicator is deemed to have been fulfilled when a contract has been concluded between the economic operator and Altum for the execution of the project. The selection criteria shall ensure that the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation.
52	2.2.1.4i. Financial instruments to facilitate the digital transformation of economic operators	Target	Private finance attracted		EUR	0	37000000	Q2	2026	Private financing from enterprises attracted within the framework of the investment to facilitate the digital transformation of economic operators. It is planned that private investment shall be attracted for each project of at least 25 % of the eligible costs for which the loan shall be provided.
53	2.2.1.5i. Fostering the digital transformation of media companies	Target	Number of platforms and digital solutions created	N/A	Number	0	3	Q2	2025	Three platforms or IT solutions have been created, tested and accessible to users.
54	2.2.1.5i. Fostering the digital transformation of media companies	Target	Number of projects supported	N/A	Supported economic operators. projects	0	10	Q2	2026	The indicator is deemed to have been fulfilled when a contract between the operator and the CFCA for obtaining a grant for the execution of the project has been concluded.
55	2.3.r. Development of a sustainable and socially responsible support framework for adult learning	Milestone	Criteria and arrangements for incentives and responsibilities for companies to educate their employees and create more opportunities and rights for employees to participate in education	Cabinet Regulation entered into force	N/A	N/A	N/A	Q4	2022	Cabinet Regulations have entered into force that shall set criteria and procedures for incentives and responsibilities of enterprises in education of their employees and creation of wider opportunities and rights for employees to participate in education.
56	2.3.r. Development of a sustainable and socially responsible support framework for adult learning	Target	Share of adults (25-64) involved in adult learning in the last four weeks prior to the survey (%)		%	6,6	8	Q4	2025	The target to be achieved within the framework of the plan is determined on the basis of the mid-term goal of Latvia’s medium-term policy planning document – Education Development Guidelines 2021-2027, which is planned to be approved by the Cabinet of Ministers by mid-2021 – to increase adult participation in education from 6,6% (2020) to 12 % (2027), which is to increase adult participation in education to 8 % by 2025. The achievement of the target is directly linked to planned reform measures for the development of adult learning, as the current approach ensures that adult participation in learning varies between 6 % and 8%, does not exceed it and is not stable.
57	2.3.r. Development of a sustainable and socially responsible support framework for adult learning	Milestone	Adoption of criteria, modalities and support measures for incentives and responsibilities for companies (in particular SMIs) to educate their employees	Cabinet Regulation entered into force	N/A	N/A	N/A	Q4	2023	Cabinet Regulations on support measures (financial/non-financial) to stimulate enterprises (in particular SMEs) to develop the skills of their employees have entered into force. This shall include the criteria for receiving such support and the procedure for implementing the support measures, involving a wide range of interested parties (project “21LV06”). A system for monitoring the implementation of support measures shall also be developed within the framework of the TSI project.
58	2.3.r. Development of a sustainable and socially responsible support framework for adult learning	Milestone	Developing the concept of skills funds	Regulations of the Cabinet of Ministers entered into force	N/A		N/A	Q4	2023	Cabinet Regulations for the Implementation of Skills Funds have entered into force, defining the set-up of the skills funds and the rights and responsibilities of the involved parties.
59	2.3.r. Development of a sustainable and socially responsible support framework for adult learning	Target	Piloting skills funds	Creation of Skills Funds	Number	0	3	Q2	2026	Three pilot projects on Skills Funds in selected sectors (three sectors with a higher degree of readiness for such a social dialogue-based approach e.g. general agreements have been carried out). The aim of the pilot project is to assess the effectiveness of such an approach in the context of Latvia, including by piloting aspects such as (a) the proportionality and dynamic over time of public and private co-investment, (b) the cooperation model between enterprises and workers’ organisations in sectors and related sectors for the preparation of a common training order, including the full integration of 'future skills', (c) the effectiveness of the measure in achieving its objectives
60	2.3.r. Development of a sustainable and socially responsible support framework for adult learning	Milestone	Development of the Individual Learning Accounts (ICA) approach	Regulations of the Cabinet of Ministers entered into force	N/A		N/A	Q4	2023	Entry into force of Regulations specifying the approach for the development of the individual learning account including: (a) the establishment of eligibility criteria, (b) the establishment of criteria for the selection of educational providers.
61	2.3.r. Development of a sustainable and socially responsible support framework for adult learning	Target	Piloting the individual learning account approach			0	1	Q3	2026	One pilot project has been completed to assess the establishment of the individual learning account solution most appropriate to the situation of Latvia. The pilot project is expected to involve 3500 persons who are in the process of setting up the individual learning accounts and administering these individual learning accounts and storing data on participation and output creators during the project.
62	2.3.1.1.i. Delivering high-level digital skills	Target	Number of professionals (business, academic and public sector) and students with advanced digital skills in quantum technologies, HPC and language technologies		Number	0	3000	Q3	2026	Number of business specialists, academic and research professionals as well as public sector professionals, higher education students and other stakeholders who have received support for attending advanced digital skills training modules in quantum technologies, HPC and language technologies. It is planned that approximately 20 study modules shall be developed for inclusion in bachelor’s, master’s, doctoral programmes in all thematic groups of education, as well as adult education programmes for professionals employed in enterprises and other stakeholders with an appropriate knowledge base. The content of the study modules shall consist of the knowledge accumulated so far in the fields of HPC, quantum technologies and language technologies, as well as the results of research carried out under the ANM.
63	2.3.1.2.i. Development of key digital skills of enterprises	Target	Number of businesses to whom the acquisition of basic digital skills has been ensured	N/A	Number	0	1286	Q2	2024	Number of businesses to whom the acquisition of basic digital skills has been ensured. The support instrument shall provide training to 3 000 enterprises (1286 by Q2 2024) including by using MOOC online courses, as well as by focusing on improving digital skills. The selection criteria shall ensure that the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation.
64	2.3.1.2.i. Development of key digital skills of enterprises	Target	Number of businesses to whom the acquisition of basic digital skills has been ensured (in line with exclusion list described in the RRP for compliance with the DNSH Technical Guidance (2021/C58/01).)	N/A	Number	0	3000	Q2	2026	Number of businesses to whom the acquisition of basic digital skills has been ensured. The support instrument shall provide training to 3 000 enterprises (1286 by Q2 2024) including by using MOOC online courses, as well as by focusing on improving digital skills. The selection criteria shall ensure that the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation.
65	2.3.1.3.i. Development of a self-accompanied training approach for ICT specialists	Target	Number of ICT specialists trained in a non-formal education approach	N/A	Number	0	1000	Q3	2026	Professionals involved in self-managed ICT training that have completed at least one education stage
66	2.3.1.4.i. Development of the approach to individual learning accounts	Target	Adults supported to acquire digital skills through individual learning account resources	N/A	Number	0	1500	Q4	2024	Adults supported to acquire digital skills through individual learning account resources
67	2.3.1.4.i. Development of the approach to individual learning accounts	Target	Adults supported to acquire digital skills through individual learning account resources	N/A	Number	1500	3500	Q3	2026	Adults supported to acquire digital skills through individual learning account resources
68	2.3.r. Digital skills for the digital transformation of society and government	Target	Upskilling digital skills 16-74: citizens with at least basic digital skills.	N/a	%	43 (2020)	54	Q3	2026	Share of Latvian inhabitants with at least basic digital skills. The achievement of the target is directly linked to the planned reform measures, which include both strengthening the structure of digital skills levels, i, allowing them to be assessed on the basis of a common approach and the design of appropriate training measures to improve them, as well as to assess the results achieved by these training activities and their relevance to the objectives set.
69	2.3.r. Digital skills for the digital transformation of society and government	Milestone	The normative framework strengthens and implements a common framework for assessment of basic digital skills, identification and planning of training needs and assessment	Regulatory framework entered into force	N/A	N/A	N/A	Q4	2022	Legislative acts establishing a common framework for the assessment of basic digital skills, the identification and planning of training needs and the assessment based on DigiComp 2.1 have entered into force.
70	2.3.r. Digital skills for the digital transformation of society and government	Milestone	Amendments have entered into force to normative acts on national higher education standards, envisaging achievement of digital competence study results at the corresponding levels of the Latvian Qualification Framework.	Amended regulatory framework entered into force	N/A	N/A	N/A	Q4	2022	Amendments to national higher education standards (State Standard for Higher Academic Education and National Standard for Higher Vocational Education) have entered into force. They shall establish the results to be achieved in the acquisition of digital competences and ensure their application in the development, licensing and accreditation of higher education programmes, providing that study programmes that are drawn up, licensed and accredited after the entry into force of the regulatory framework include such achievable study results and appropriate courses or modules to achieve them.
71	2.3.2.1 Digital skills for citizens, including young people	Target	Number of citizens with advanced digital self-service skills who have participated in technological innovation activities	N/a	Number	0	20000	Q4	2024	Number of citizens with advanced digital self-service skills who have participated in technological innovation activities. The digital self-service skills learning approach (e-learning course) has been developed and implemented, including the development and implementation of the Joint Technology Creativity Guidelines for the development of youth technology and innovation capacity. Number of citizens with advanced digital self-service skills who have participated in technological innovation activities. he digital self-service skills learning approach (e-learning course) has been developed and implemented, including the development and implementation of the Joint Technology Creativity Guidelines for the development of youth technology and innovation capacity.
72	2.3.2.1 Digital skills for inhabitants, including young people	Target	Number of inhabitants with advanced digital self-service skills who have participated in technological innovation activities	N/a	Number	20000	50000	Q3	2026	As a result of the investment, the digital self-service skills learning approach (e-learning course) has been developed and implemented, including the development and implementation of the Joint Technology Creativity Guidelines for the development of youth technology and innovation capacity. At least 40 thousand inhabitants have taken part in the training (out of those self-training has reached at least 5000); and at least 10 thousand persons have participated in technological innovation activities.
73	2.3.2.1 Digital skills for inhabitants, including young people	Target	Number of municipalities with digital skills development programmes for young people	N/a	Number	0	42	Q3	2026	As a result of investments, 42 municipalities had defined and fully implemented programmes of activities to ensure the acquisition and use of digital skills in youth work, the creation of a digital environment for youth work and foster the participation of young people in local government processes
74	2.3.2.2.i. Development of state and local government digital transformation skills and capabilities	Milestone	Digital skills and competence framework developed by June 2023		N/A	N/A		Q2	2023	Public administration digital skills plan and framework, including curricula, shall be made available and trainings organised on the public administration’s maternal platform.
75	2.3.2.2.i. Development of state and local government digital transformation skills and capabilities	Target	Public administration (state and local government) employees with advanced digital skills, including e-learning	N/a	Number	N/A	25160	Q4	2024	Number of people who have acquired advanced digital skills. In the result of investments the frameworks of general and specialised digital competences, competencies development roadmaps and curriculum content has been created; digital competencies and skills training section with competence frameworks, curriculum and training programmes organised and operational on the single digital distance learning environment/platform of public administration; estimated number of trainees and number of trainees who completed assessment centres (with certification); usability of self-managed learning
76	2.3.2.2.i. Development of state and local government digital transformation skills and capabilities	Target	Public administration (state and local government) employees who have developed digital transformation skills, including e-learning;	N/a	Number	N/A	62900	Q3	2026	Number of people who have acquired advanced digital skills. In the result of investments the frameworks of general and specialised digital competences, competencies development roadmaps and curriculum content has been created; digital competencies and skills training section with competence frameworks, curriculum and training programmes organised and operational on the single digital distance learning environment/platform of public administration; estimated number of trainees and number of trainees who completed assessment centres (with certification); usability of self-managed learning
77	2.3.2.3i. Closing the digital divide for socially vulnerable pupils and educational institutions	Milestone	Entry into force of a regulatory framework laying down procedures for the organisation and implementation of remote learning	Entry into force of a regulatory framework laying down procedures for the organisation and implementation of remote learning	N/A	N/A	N/A	Q4	2021	Entry into force of regulations of the Cabinet of Ministers laying down criteria and conditions for the organisation and conduct of remote learning to ensure that remote learning is organised and implemented in all Latvian educational institutions and levels of education (except at pre-school level). The educational establishment shall include in its internal rules a framework for the organisation and implementation of remote learning, including: 1. the procedure by which the educational establishment shall identify whether technical means are available to learners for the provision of remote learning, as well as the procedures for providing these technical means if they are not available to learners; 2. the procedure for recording students’ participation in remote learning and the performance of the tasks assigned; 3. in cases where the participation of the learner in remote learning is not possible or is hampered for technical reasons; 4. the procedures for ensuring compliance with safety requirements during remote learning and the procedures for communication with the legal representatives of the learner in the event of safety or health risks; 5. The procedure by which learners make use of educational institution resources and infrastructure (premises, libraries, etc.) as part of remote learning.
78	2.3.2.3i. Closing the digital divide for socially vulnerable groups and educational institutions	Target	Number of ICT equipment units for the target group (learners )	N/a	Number	N/A	13310	Q4	2022	Number of ICT equipment units available for learning from the “computer library”, which improves learning efficiency and reduces inequalities. The “Computer Library” of schools provides an opportunity for pupils and teachers who need computer to learn and teach it to “borrow” for the duration of their studies, while working on a sustainable system that shall ensure access to technology for every pupil and teachers across Latvia.
79	2.3.2.3i. Closing the digital divide for socially vulnerable pupils and educational institutions	Target	Number of ICT equipment units for the target group (learners)	N/a	Number	N/A	26620	Q4	2023	Number of ICT equipment units available for learning from the “computer library”, which improves learning efficiency and reduces inequalities. The “computer library” of schools provides an opportunity for pupils and teachers who need computer to learn and teach it to “borrow” for the duration of their studies, while working on a sustainable system that shall ensure access to technology for every pupil and teachers across Latvia.
80	2.4.r. Broadband infrastructure development	Milestone	Adoption of technical requirement for connected and automated driving	Adoption of common technical requirements	N/A	N/A	N/A	Q4	2021	1. The SJSC “Latvian State Radio and Television Centre” identifies the common technical requirements for electronic communications operators to allow for connected and automated driving. This shall take into account the needs of operators in cooperation with representatives of Estonia, Lithuania and Poland to facilitate the development of a connected and automated driving corridor along the Via Baltica track Following that common technical requirements are adopted by the procurement committee.
81	2.4.r. Broadband infrastructure development	Milestone	Adoption of a common model for the development of the last mile	Adoption of a common model for the development of the last mile	N/A	N/A	N/A	Q4	2021	1. On the basis of the studies carried out, the Ministry of Transport shall draw up a development plan for the electronic communications sector, which shall include a draft model. 2. The outcome of the public consultation shall lead to a final decision on the model, which shall be adopted and implemented.
82	2.4.1.1.i. Construction of the Passive Infrastructure on the Via Baltica Corridor for 5G coverage	Target	Availability of optical networks on the Via Baltica track	N/a	%	6,27	100	Q4	2025	The indicator shall be measured as a percentage of the overall length of the Via Baltica track. The data shall be derived from the works completed in the project, i.e. the overall length of the installed optical network.
83	2.4.1.2i. Broadband or very high capacity network “last mile” infrastructure development	Target	Number of households, businesses, schools, hospitals and other public buildings which have access to the broadband connections to a very high capacity network	N/a	Number	0	1500	Q4	2025	The indicator is defined as the number of households, businesses a schools, hospitals and other public buildings which have access to the broadband connections to a very high capacity network as certified by a contract with an electronic communications merchant for subscription to a service speed of at least 100 Mbps (very high capacity broadband network (VHCN)) and have access to such a service, i.e. the possibility to conclude a contract with an electronic communications merchant and start receiving the service within an indicative month of the service application.

C. COMPONENT 3: REDUCTION OF INEQUALITY

The general objective of this component of the Latvian recovery and resilience plan is to address the challenges of territorial and social inequality in Latvia, exacerbated by the COVID-19 pandemic. The component aims to reduce inequality by creating more jobs in the regions, improving regional connectivity and access to quality services, providing more affordable housing, improving the school infrastructure, helping to up-skill and re-skill workers and unemployed, strengthening the social safety net, improving accessibility to buildings for persons with disabilities, and new long-term care facilities for the elderly. All the measures in the component support either of the two headline reforms – the ongoing administrative territorial reform and the minimum income reform.

The component supports addressing the Country Specific Recommendations on social exclusion, notably to improve the adequacy of minimum income benefits, minimum old-age pensions and income support for people with disabilities and on the quality and efficiency of education and training, focusing on low-skilled workers and jobseekers (Country Specific Recommendation 2, 2019). The component also supports addressing the recommendation to focus investment-related economic policy to the provision of affordable housing, considering regional disparities (Country Specific Recommendation 3, 2019). Finally, the component supports addressing the recommendation to strengthen the social safety net and mitigate the employment impact of the crisis, including through improved active labour market measures and skills (Country Specific Recommendation 2, 2020).

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

C.1. Description of the reforms and investments for non-repayable financial support

Reform: 3.1.1.r. Administrative territorial reform

The general objective of this reform is to improve the quality of services for the inhabitants of Latvia and improve local business environment by reducing the number of administrative units and increasing the efficiency and accessibility of service delivery. The actions described below (renovation and reconstruction of state regional and local roads, capacity building of local municipalities and planning regions ensuring more efficient public services, development of infrastructure for industrial parks, affordable housing, development of school infrastructure and school busses) are linked with and support this reform measure.

The measure includes the adoption of a new Municipality Law reviewing the functions and tasks of local governments. The new law shall ensure better governance at the municipal level, a clearer separation and division of competences between the decision-making and the executive powers, and increasing the participation of citizens in the decision-making of local communities.

While the overall administrative territorial reform will continue beyond the timeframe of the RRF, the implementation of the specific reform shall be completed by 31 December 2023.

Investment: 3.1.1.1.i. Improvement of the network of regional and local roads

The general objective of this investment is to renovate and reconstruct state regional and local roads to improve road safety, ensure the connectivity of the new municipalities and enhance the access of citizens to jobs and services.

The investment measure consists of renovation and reconstruction of 210km of state regional and local roads in accordance with a priority list of the Ministry of Environmental Protection and Regional Development defined in collaboration with planning regions, Latvian State Roads and the Ministry of Transport. As flanking actions, seven urban-suburban electric battery trains and 21 low-emission vehicles (electric busses and trams) shall be procured to complement Latvia’s public transport fleet.

The main investment measure shall be implemented by 31 December 2024, while the flanking measures shall be completed by 31 August 2026.

Investment: 3.1.1.2.i. Strengthening the capacity of municipalities to improve service efficiency and quality

The general objective of this investment is to improve the quality and efficiency of municipal services following the reorganisation of local administrations. The increased capacity and professional skills of municipalities is expected to allow them to better serve citizens.

This investment measure consists of the entry into force of a government regulation defining the scope of municipal service evaluation, provision of methodological support to capacity building of municipal staff and planning and providing municipal services. Furthermore, the measure shall identify the shortcomings of local government services and actions for their improvement. Finally, the measure shall increase the capacity of 1 300 staff of municipalities and planning regions through dedicated trainings, study visits, exchange of experience, professional assessment and other capacity building measures.

The implementation of the investment shall be completed by 31 August 2026.

Investment: 3.1.1.3.i. Investments in public infrastructure to develop industrial parks in the regions

The general objective of this investment is to support the infrastructure of industrial zones and attract investors and firms to Latvia’s regions outside Riga helping to create high added-value and export-oriented jobs and to reduce the development divide between Riga region and the rest of the country.

The measure consists of the adoption of a support programme for the development of industrial parks and territories in the regions ; tendering and awarding contracts for the development of industrial parks to specific beneficiaries who have developed an industrial territory or park development strategy or business plan; signing at least four letters of intent or contracts with internationally recognised industrial park operators and/or potential tenants providing for the attraction/execution of additional private sector investments of at least EUR 85 700 000. Finally, the measure includes the completion of the construction of at least four industrial parks of national importance in the regions, including the establishment of necessary utility connections (including heating, water and sewerage, electricity), renewal or installation of access roads near industrial areas, as well as the development of buildings intended for commercial purposes and their related infrastructure. As a result of the measure, at least 328 new jobs with average salaries exceeding the average salaries in the respective economic sector shall be created.

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for upcoming calls for projects shall exclude the following list of activities: (i) activities related to fossil fuels, including downstream use 21 ; (ii) activities under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks 22 ; (iii) activities related to waste landfills, incinerators 23 and mechanical biological treatment plants 24 ; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation may be selected.

The implementation of the investment shall be completed by 31 August 2026.

Investment: 3.1.1.4.i. Establishing a financing fund for the construction of low-rent housing

The general objective of this measure is to stimulate housing supply, provide affordable housing, contribute to regional labour mobility, and help attract and retain skilled professionals in the regions.

The measure consists of the entry into force of a new legal framework for rents to ensure a fair balance between the interests of the tenant and the landlord and to ease the resolution of rental disputes; adoption of a housing affordability strategy; adoption of a low-rent housing regulation defining the size, scope and type of support and criteria for beneficiaries; the approval of projects for at least 700 apartments, and construction of at least 300 apartments within the timeframe of the RRF. The average size of an apartment shall be 52,125 m² and the rent ceiling indicatively at EUR 4.40/m². The approved projects shall meet high quality requirements: the buildings shall be nearly zero-energy and appropriate quality tests (acoustic measurements, building air permeability test) shall be carried out at the time of entry into service.

The implementation of the investment shall be completed by 31 August 2026.

Investment: 3.1.1.5.i. Development of infrastructure and equipment of educational institutions

The general objective of this investment measure is to improve the quality of regional schools by coupling investment with the optimization of school network.

The measure consists of the entry into force of a legal framework establishing the quantitative and qualitative criteria for general secondary education institutions, the adoption of at least 20 decisions by local governments on the reorganisation of schools, and the improvement of school infrastructures. The investments shall improve the school facilities, such as hygienic requirements in classrooms, engineering networks (including ventilation systems), sufficient and energy efficient lighting, and other ergonomic and modern education environment solutions. Investments may also be planned for the purchase of information technology and science, technology, engineering and mathematics equipment, for the implementation of new improved curricula and for the implementation of remote and online learning.

The implementation of the investment shall be completed by 31 August 2026.

Investment: 3.1.1.6.i. Purchase of zero-emission vehicles for the performance of municipal functions and services

The general objective of this investment measure is to improve the functions and services of municipalities with a focus on the mobility of students while optimising the school network. A secondary objective is to contribute to the greening of public transport in Latvia by investing in low-emission vehicles.

The measure consists of the adoption of a government regulation setting out the conditions for municipalities to obtain the support for procuring zero-emission vehicles, procurement process and delivery of 15 low-emission vehicles (electric busses) for the transport of learners in the regions.

The implementation of the investment shall be completed by 31 December 2025.

Reform: 3.1.2.r. Access to social and employment services in support of the minimum income reform

The general objective of this reform is to reduce inequality, improve the social safety net, foster social integration and inclusion in Latvia.

The measure consists of two main steps. The first step is the adoption of a plan for improvement of the minimum income support system for 2022-2024 to strengthen the methodology for calculating the minimum income; the adoption of Social Protection and Labour Market Guidelines 2021 — 2027 to promote the social inclusion of the population, to reduce income inequality and poverty, develop accessible and tailored social services and promote a high level of employment in a quality work environment; the adoption of a Social Services Development Plan 2021 — 2023 aimed at improving the provision of community-based services; and the adoption of a Plan for the Promotion of Equal Opportunities for Persons with Disabilities 2021-2023, which aims to develop an integrated support system that meets the needs of persons with disabilities. The second step is the entry into force of legislative amendments by the national Parliament to improve the minimum income support system, including setting a floor of the minimum income of no less than 20% of the median income and establishing a procedure for annual positive indexation (as of 2023).

The implementation of the reform shall be completed by 31 December 2021.

Investment: 3.1.2.1.i. Measures to promote access to public services and employment for people with disabilities

The general objective of this investment measure is to improve access to facilities, jobs and services for people with disabilities thereby contributing to their social inclusion.

The measure consists of selecting 63 public and municipal buildings and retrofitting them to ensure access to the facilities and information for persons with functional impairments (vision, hearing, mobility and mental impairment), including improvement of visual information, adaptation and provision of evacuation systems for persons with disabilities, and the installation of aids, such as ramps, pans, lifts, easy-opening or automatic doors. Furthermore, the measure shall include the selection, retrofitting and improving the physical accessibility of housing for 259 persons with disabilities (with more severe disabilities ) improving their access to employment and services, thereby promoting their human dignity and quality of life.

The implementation of the investment shall be completed by 31 December 2024.

Investment: 3.1.2.2.i. Development of a forecast tool

The general objective of this investment measure is to upgrade the macroeconomic modelling capacity to assess the long-term sustainability of the social security system.

The measure consists of tendering and developing econometric models and a methodology for the long-term forecasting of social support, including pensions, developing technical specifications for the information system and monitoring the development of the system. The final deliverables shall include an evaluation report on the current situation; a mathematical model for pension forecasting; the evaluation of the current forecasting tool and its potential; technical specifications for the development of an information system; monitoring of the system development throughout the measure.

The implementation of the investment shall be completed by 31 December 2024.

Investment: 3.1.2.3.i. Resilience and continuity of the long-term social care service

The general objective of this investment measure is to enable the transition from institutional long-term care provision to more community-based care model.

The measure consists of developing a standard construction design for new long-term care facilities, conclusion of agreements between the Ministry of Welfare and 18 municipalities for the establishment of new places for the provision of long-term care services close to the family environment, and construction of new long-term care facilities for 852 seniors in 71 buildings. The construction of these buildings shall ensure a maximum of 12 persons per building and fitting each building with appliances, equipment and furniture. The new long-term care model shall ensure the transition from institutional to family-type care for people of retirement age.

The implementation of the investment shall be completed by 31 December 2024.

Investment: 3.1.2.4.i. Synergistic development of social and occupational rehabilitation services for the promotion of the resilience of people with functional impairments

The general objective of this investment measure is to improve the social inclusion and rehabilitation of persons with functional disabilities through the development and application of a uniform service standard.

The measure consists of the development, piloting and adoption of an occupational rehabilitation service standard that promotes the maintenance, renewal and acquisition of new education or skills for re-employment for persons with physical disabilities. The measure shall also help to improve the infrastructure and equipment in buildings where services shall be provided.

The implementation of the investment shall be completed by 30 June 2025.

Investment:  3.1.2.5.i. Participation in the labour market of unemployed, jobseekers and people at risk of unemployment

The general objective of this investment measure is to improve the upskilling and reskilling of low-skilled workers and unemployed to improve their job opportunities in the labour market.

The measure consists of developing a re-training and up-skilling offer with a focus on digital skills for clients (unemployed, jobseekers, persons at risk of unemployment) of the State Employment Agency (SEA), implementing active labour market policy measures, development of digital tools for the assessment of skills, and upskilling at least 20 450 persons. Under the measure, the Agency shall focus on a more in-depth individual approach based on the results of a reformed and adjusted profiling system. The investment will complement the Active Labour Market Policy (ALMP) measures planned under cohesion funds for period 2021-27, which will start after the end of RRP investment.

The implementation of the investment shall be completed by 31 August 2026.

C.2.    Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

Sequential Number	Related Measure (Reform or Investment)	Milestone / Target	Name	Qualitative indicators    (for milestones)	Quantitative indicators    (for targets)			Indicative timeline for completion		Description of each milestone and target
					Unit of measure	Baseline	Goal	Quarter	Year
84	3.1.1.r. Administrative territorial reform	Milestone	Entry into force of a new “Municipality Law”	Entry into force of the new “Municipality Law”	N/A	N/A	N/A	Q4	2023	Entry into force of the “Municipality Law” which shall review the functions and tasks of local governments, to align them with the outcome of the administrative territorial reform (replacing the Law on Local Government of 19.05.1994). It shall ensure improved governance after the administrative territorial reform of the municipalities, promoting democratisation, and a clearer separation of the decision-making power from the executive, establishing a clear division of competences and functions, reducing the concentration of powers and increasing the participation of the local community on a regular basis.
85	3.1.1.1.i. Improvement of the network of regional and local roads	Target	Renovated and rebuilt, regional and local roads for the safe accessibility of the county administrative centres and their services and jobs and for the full functioning of the new municipalities.	N/A	Km	0	70	Q4	2022	The state regional and local roads have been renovated and rebuilt for the accessibility to the administrative centres of the counties and their services and jobs and for the full functioning of the new municipalities. Road construction works shall involve investments that improve road safety.
86	3.1.1.1.i. Improvement of the network of regional and local roads	Target	Renovated and rebuilt, regional and local roads for the safe accessibility of the county administrative centres and their services and jobs and for the full functioning of the new municipalities	N /A	Km	70	210	Q4	2024	The state regional and local roads have been renovated and rebuilt for the accessibility to the administrative centres of the counties and their services and jobs and for the full functioning of the new municipalities. Road construction works shall involve investments that improve road safety.
87	3.1.1.1.i. Improvement of the network of regional and local roads	Target	Purchase of urban – suburban electric trains (battery electric trains)	N/A	Number	0	7	Q3	2026	Delivery of 7 zero-emission electric battery trains.
88	3.1.1.1.i. Improvement of the network of regional and local roads	Target	Increase in the number of electric transport units in the city of Riga (electric buses, trams)	N/A	Number	0	21	Q3	2026	Delivery of 21 zero-emission urban public transport units (electric buses and trams) for the Riga Metropolitan Network.
89	3.1.1.2.i. Strengthening the capacity of municipalities to improve the efficiency and quality of their operations	Milestone	The legal basis for implementing support for capacity building of local governments has been adopted	Regulations of the Cabinet of Ministers have been adopted	N/A	N/A	N/A	Q4	2022	Cabinet Regulations have been adopted for the implementation of support for capacity building of local governments, including:    (a) defining the scope and parameters of the capacity building in the municipalities;    (b) municipal public service assessments;   (c) provision of methodological support and capacity- building;   (d) piloting ways of planning and providing municipal public services.
90	3.1.1.2.i. Strengthening the capacity of municipalities to improve the efficiency and quality of their operations	Milestone	Completion of the assessment of local government public services, identifying shortcomings and measures to improve them	Completion of assessment	N/A	N/A	N/A	Q4	2024	Completion of the assessment of the efficiency of the provision of local government public services in accordance with the provisions of the Cabinet of Ministers Regulations on Implementation of Local Government Capacity Building Support.
91	3.1.1.2.i. Strengthening the capacity of municipalities to improve the efficiency and quality of their operations	Target	Number of local government employees trained	N/A	Number	0	750	Q4	2024	Number of local government employees trained, their operational efficiency improved, methodological support provided to work in municipalities following the administrative territorial reform. The training and other capacity building measures have been carried out on the basis of an assessment of the services and local government capacity.
92	3.1.1.2.i. Strengthening the capacity of municipalities to improve the efficiency and quality of their operations	Target	Number of local government employees trained	N/A	Number	750	1300	Q3	2026	Number of local government employees trained, their operational efficiency improved, methodological support provided to work in municipalities following the administrative territorial reform. The training and other capacity building measures have been carried out on the basis of an assessment of the services and local government capacity.
93	3.1.1.3.i. Investments in business public infrastructure for the development of industrial parks and areas in regions	Milestone	Adoption of a support programme for the development of industrial parks and territories in the regions	Cabinet Regulations and coordinated aid programme adopted	N/A	N/A	N/A	Q4	2022	Regulations of the Cabinet of Ministers laying down the conditions and criteria for the provision of aid to industrial areas have been drawn up and adopted. The selection criteria shall ensure that the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation.
94	3.1.1.3.i. Investments in business public infrastructure for the development of industrial parks and areas in regions	Milestone	Award of contracts for the development of industrial parks in the regions	Award of contracts for the projects’ implementation	N/A	N/A	N/A	Q4	2023	Award of contracts for the development of industrial parks in the regions to private sector beneficiaries who have developed an industrial park development strategy or business plan. The selection criteria shall ensure that the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation.
95	3.1.1.3.i. Investments in business public infrastructure for the development of industrial parks and areas in regions	Target	Letters of intent/contracts concluded	N/A	Number	0	4	Q4	2025	At least four letters of intent/contracts signed with internationally recognised industrial park operators and/or potential investors by attracting/carrying out non-financial investments of at least EUR 85 741 349. The selection criteria shall ensure that the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation.
96	3.1.1.3.i. Investments in business public infrastructure for the development of industrial parks and areas in regions	Target	Construction completed of industrial parks/territories where public infrastructure is developed in the regions	N/A	Number	0	4	Q4	2025	Construction completed of at least four national industrial parks/territories, including establishment of necessary industrial connections and increase of their related capacity (including heating, water and sewerage, electricity), renewal or installation of access roads near industrial areas, as well as development of buildings for commercial purposes and their related infrastructure.
97	3.1.1.3.i. Investments in business public infrastructure for the development of industrial parks and areas in regions	Target	Creation of new jobs in the industrial parks with average salaries above the average salary in the respective economic sector	N/A	Number	0	328	Q3	2026	Submission of a list of the jobs created by the park operators or private investors and salaries, certifying the creation of new jobs with salaries above average salaries in the respective economic sector.
98	3.1.1.4.i. Establishing a financing fund for the construction of low-rent dwellings	Milestone	Entry into force of the law balancing the rights of tenants and landlords	Entry into force of the Rental Law of housing premises	N/A	N/A	N/A	Q2	2021	Entry into force of a new legal framework for rents to ensure a fair balance between the interests of the tenant and the landlord and to speed up the resolution of disputes over the term of the rent and the settlement of rents, which is particularly important in order to promote the construction of renting housing and consequently to facilitate affordability of housing.
99	3.1.1.4.i. Establishing a financing fund for the construction of low-rent dwellings	Milestone	Adoption of a housing affordability strategy	The government has adopted housing, affordability strategy	N/A	N/A	N/A	Q2	2022	The housing affordability strategy shall include directions of action, policy indicators and set of tasks for promoting access to housing, providing solutions for providing housing affordability support to households of different types and income levels, including the lowest-income households, and that support mechanisms and regulations promote both the repair of the existing housing stock and the development of a new housing stock.
100	3.1.1.4.i. Establishing a financing fund for the construction of low-rent dwellings	Milestone	Government regulation on the construction of low-rent dwellings	Entry into force of government regulation on construction of low-rent dwellings	N/A	N/A	N/A	Q3	2022	Regulation of the Cabinet of Ministers on the construction of low-rent dwellings has entered into force in order to define size, scope and type of support and criteria for beneficiaries.
101	3.1.1.4.i. Establishing a financing fund for the construction of low-rent dwellings	Target	Number of apartments within approved projects	N/a	Number	0	300	Q4	2024	The funding shall have been approved by national development institution Altum for the projects of at least 300 apartments.  As part of the approved projects, housing shall be provided for a low rent (indicatively, EUR 4.40/m²). The approved projects shall meet high quality requirements: (1) the building shall be a nearly zero-energy building; (2) Appropriate quality tests (acoustic measurements, building air permeability test) shall be carried out at the time of entry into service.
102	3.1.1.4.i. Establishing a financing fund for the construction of low-rent dwellings	Target	Number of apartments within approved projects	N/a	Number	300	700	Q3	2026	The funding shall have been approved by national development institution Altum for the projects of at least 700 apartments;   As part of the approved projects, housing shall be provided for a low rent (indicatively, EUR 4.40/m²). The approved projects shall meet high quality requirements: (1) the building shall be a nearly zero-energy building; (2) Appropriate quality tests (acoustic measurements, building air permeability test) shall be carried out at the time of entry into service.
103	3.1.1.4.i. Establishing a financing fund for the construction of low-rent dwellings	Target	Number of apartments built	N/a	Number	0	300	Q3	2026	Projects finished with 300 apartments built and delivered in line with the following specifications: (1) the building shall be a nearly zero-energy building; (2) appropriate quality tests (acoustic measurements, building air permeability test) shall be carried out at the time of entry into service.
104	3.1.1.5.i. Development and equipping of educational institutions’ infrastructure	Milestone	Definition of qualitative and quantitative criteria adopted	The legal framework has entered into force	N/A	N/A	N/A	Q4	2021	Entry into force of a legal framework adopted by the government promoting the provision of high-quality education by promoting a comprehensive offer of educational programmes at regional level, as well as by creating a network of general secondary education institutions in line with the demographic situation. The legal framework shall establish minimum quantitative and qualitative criteria (such as minimum number of learners, availability of infrastructure, etc.) for general secondary education institutions.
105	3.1.1.5.i. Development and equipping of educational institutions’ infrastructure	Milestone	Adoption of decisions by local councils on the reorganisation of at least 20 general secondary education institutions	Adoption of decisions by local councils	N/A	N/A	N/A	Q2	2022	Reorganisation decisions (mergers, change of education level) of at least 20 general secondary education institutions adopted by local governments.
106	3.1.1.5.i. Development and equipping of educational institutions’ infrastructure	Target	Developing and equipping educational institutions’ infrastructure	n/a	Number	0	20	Q3	2026	Improvement of infrastructure of 20 general education institutions established by local governments according to specifications: investments may be envisaged for the improvement of the education institution physical environment - classrooms that met hygienic requirements, reconstruction of engineering networks (including ventilation systems), ensure sufficient and energy efficient lighting, and other ergonomic and modern education environment solutions. These school infrastructure investments under the RRF may also be used for the purchase of information technology and science, technology, engineering and mathematics equipment, for implementation of new improved curricula and for implementation of remote and online learning.
107	3.1.1.6.i. Purchase of zero-emission vehicles for the performance of municipal functions and services	Milestone	A support programme has been adopted for the performance of local government functions and the purchase of transport vehicles for the provision of public services	Entry into force of government regulation	N/A	N/A	N/A	Q4	2022	Entry into force of Cabinet Regulations laying down implementing conditions for the performance of local government functions and the purchase of electric transport vehicles for the provision of public services
108	3.1.1.6.i. Purchase of zero-emission vehicles for the performance of municipal functions and services	Target	Amount of funding under contracts concluded for the purchase of electric busses for the performance of municipal functions and public services	n/a	Amount (in EUR)	0	9 500 000	Q4	2024	Award of contracts for the purchase of electric busses for the performance of local government functions and public services for a total value of at least 9 500 000 EUR.
109	3.1.1.6.i. Purchase of zero-emission vehicles for the performance of municipal functions and services	Target	Number of electric school busses purchased	N/A	Number	0	15	Q4	2025	Delivery of 15 electric school busses to municipalities as beneficiaries for municipal transport of learners
110	3.1.2 Access to social and employment services in support of minimum income reform	Milestone	Adoption of the strategic framework for further development of the minimum income support system	The strategic framework for further development of the minimum income support system has been approved by the Cabinet of Ministers	N/A	N/A	N/A	Q4	2021	A strategic framework for further development of the minimum income support system has been developed and approved by the Cabinet of Ministers, which shall include at least:   — Plan for improvement of the minimum income support system for 2022-2024, with a view to strengthening the methodology for calculating the minimum income;   — Social Protection and Labour Market Guidelines 2021. —2027 to promote the social inclusion of the population, reduce income inequalities and poverty, develop accessible and tailored social services and promote a high level of employment in a quality work environment;   — Social Services Development Plan 2021. —2023, aimed at improving the provision of community-based services;    — The Plan for the Promotion of Equal Opportunities for Persons with Disabilities 2021-2023, which aims to develop an integrated support system that meets the needs of persons with disabilities
111	3.1.2 Access to social and employment services in support of minimum income reform	Milestone	Entry into force of legislative amendments to improve the minimum income support system	Entry into force of legislative amendments to improve the minimum income support system	N/A	N/A	N/A	Q1	2023	Entry into force of legislative amendments to improve the minimum income support system, which shall include:    — a floor of the minimum income threshold of not less than 20% of the median income;    — the procedure for revising the minimum income thresholds, which is to take place on an annual basis (from 2023), on the basis of changes in the median income and ensuring that the minimum income thresholds are not changed in the event of a decrease in the median income.
112	3.1.2.1.i. Measures to promote access to public services and employment for people with disabilities	Milestone	Selection of state and local government buildings where environmental adaptations shall be carried out	Adoption of a list of 63 selected buildings of public and local authorities in which investments to adapt the environment shall be made	N/A	N/A	N/A	Q1	2022	Buildings shall be selected for the implementation of environmental accessibility measures on 63 state and local government buildings providing welfare sector public services or municipal social services (these buildings shall already be included in the regulations of the Cabinet of Ministers). The investment shall include measures to implement a minimum accessibility standard: ensure access to the environment and information for persons with functional impairments (vision, hearing, mobility and mental impairment), including improvement of visual information, adaptation and provision of evacuation systems for persons with disabilities, and the installation of ramps, pans, lifts, easy-opening or automatic doors, etc.
113	3.1.2.1.i. Measures to promote access to public services and employment for people with disabilities	Milestone	Award of contracts for ensuring access to public facilities in the buildings of public and local authorities	Award of work contracts for the start of works on access to public facilities in the pre-selected 63 buildings of public and local authorities.	N/A	N/A	N/A	Q4	2022	Relevant public and local authorities shall award works contracts to ensure access to the facilities in 63 public and municipal buildings providing services to groups at risk of social exclusion, including persons with disabilities. Contracts shall be awarded for the provision of the implement a minimum accessibility standard: accessibility elements necessary for each building, including measures to ensure access to the facilities and information for persons with functional impairments (vision, hearing, mobility and mental impairment), including improvements to visual information, adaptation and provision of evacuation systems for persons with disabilities through the installation of ramps, pans, lifts and easy-opening or automatic doors.
114	3.1.2.1.i. Measures to promote access to public services and employment for people with disabilities	Target	Completion of construction to ensure access to public facilities in state and local government buildings	N/A	Buildings	0	63	Q4	2024	Construction work completed on 63 state and local government buildings providing services to groups at risk of social exclusion, including persons with disabilities, and handover act signed. Measures shall include the implementation of a minimum accessibility standard: access to public facilities and information for persons with functional impairments (vision, hearing, mobility and mental impairments), improvements to visual information, adaptation and provision of evacuation systems for persons with disabilities, ramps, pedals, hoists, easy-opening or automatic doors.
115	3.1.2.1.i. Measures to promote access to public services and employment for people with disabilities	Milestone	Selection of specific target group for improving physical access to housing	Adoption of a list of selected 259 persons with disabilities who need to adapt their individual housing.	N/A	N/A	N/A	Q3	2022	Adoption of a list by Ministry of Welfare of 259 persons with severe disabilities and with reduced mobility who shall benefit from support from relevant public authorities to adapt the individual housing (1 selected person per dwelling).
116	3.1.2.1.i. Measures to promote access to public services and employment for people with disabilities	Milestone	Conclusion of work contracts to adapt the housing of persons with disabilities	Conclusion of work contracts	N/A	N/A	N/A	Q3	2023	The award and conclusion of work contracts to adapt the housing of 259 persons with disabilities, ensuring that people with disabilities and functional disabilities have access to employment and services, thereby promoting human rights and quality of life. Works contracts have been concluded for the provision of such environmental accessibility elements as are necessary for the persons of the target group, providing for environmental adaptation measures (establishment of ramps and lifts, adaptation of residential and common areas, etc.) in housing for 259 persons (one person per individual dwelling).
117	3.1.2.1.i. Measures to promote access to public services and employment for people with disabilities	Target	Accessibility of the housing environment for persons with disabilities ensured	N/A	Persons	0	259	Q4	2024	The construction work completed on 259 dwellings and handover act signed. The measure shall include the adaptation of the housing of persons with disabilities, ensuring a minimum accessibility standard: access to employment and services for people with disabilities and functional disabilities, thereby promoting human rights and quality of life, including: environmental adaptation measures (establishment of ramps and lifts, adaptation of residential and common areas, etc.) for 259 persons (one person per individual dwelling).
118	3.1.2.2.i. Development of a forecast tool	Milestone	Conclusion of contract for the development of algorithms for the forecasting model, the development of technical specifications for information system and the supervision of system development	Development of technical specifications and conclusion of a contract for the consultancy service involving Latvian and foreign econometric and mathematical modelling experts	N/A	N/A	N/A	Q2	2022	Award of a contract following a competition to: - develop econometric models and a methodology for the long-term forecasting of social support, including pensions, -draw up technical specifications for the development of an information system - to monitor the development of the system.    The contract concluded shall include a timetable for the following deliverables:   —an evaluation report on the current situation;   —a mathematical model for pension forecasting;   —Evaluation of the current forecasting tool and its potential;   —technical specifications for the development of an information system;   —monitoring of the information system development throughout the project.
119	3.1.2.2.i. Development of a forecast tool	Milestone	Completion of technical specifications for social security forecasting tool information system	Technical specifications approved by the Ministry of Welfare and ready for submission to the information system developer	N/A	N/A	N/A	Q2	2023	Completion of technical specifications for a new social security forecasting tool information system. The technical specifications shall include:   —an evaluation report on the current forecasting tool and its options and recommendations for the development of the new forecasting tool;   — technical specifications for the development of system (the technical specification shall also include a requirement for the application of the Agile methodology during the system development phases).
120	3.1.2.2.i. Development of a forecast tool	Milestone	Development of a forecasting tool	Forecasting tool developed for the long-term projections of the social security system	N/A	N/A	N/A	Q4	2024	The handover act between the Ministry of Welfare and software developer is signed for the development of a forecasting tool for the long-term forecasts of the social security system that:   — provides for the possibility to use and reflect the demographic aspect more effectively in the forecasts, leading to a faster and more accurate forecasting result;   — strengthen administrative capacity in the field of social security;    —provides the possibility to enter a more detailed array of assumptions compared to the model used in the past;   — enables modelling with elsewhere existing results (e.g.: Eurostat), as well as demographic and labour market indicators;   — two handbooks have been developed for the administrator of the tool and for users.
121	3.1.2.3.i. Resilience and continuity of the long-term social care service	Milestone	Development of standard construction design	Requirements of the design task and standard construction design project developed for the provision of long-term care services close to family environment	N/A	N/A	N/A	Q3	2022	A standard construction design for the construction of buildings necessary for the provision of long-term care services close to the family environment has been adopted by the Ministry of Welfare. The construction design shall be intended for the construction of highly energy-efficient buildings (nearly zero-energy buildings). Municipalities shall be in possession of a standard construction project already ready, thus reducing project costs.   Simpler project implementation for municipalities shall reduce risks for delays in project implementation.
122	3.1.2.3.i. Resilience and continuity of the long-term social care service	Target	Conclusion of agreements with local governments on the implementation of projects	N/A	Number of agreements	0	18	Q2	2023	Agreements have been concluded between the Central Finance and Contracting Agency and 18 municipalities on the establishment of new places for the provision of long-term care services close to the family environment.
123	3.1.2.3.i. Resilience and continuity of the long-term social care service	Target	Provision of new places for long-term care services close to family settings for 852 seniors	n/a	Number of places	0	852	Q4	2024	Creation of new places for the provision of long-term care services close to the family environment for 852 persons of retirement age. The construction of these buildings shall ensure that:   —a maximum of 12 persons per building (i.e. 12 (number of service facilities per building) x71 (number of buildings built in total) = 852 (total number of newly created services);   —each building is provided with at least a predefined minimum equipment;   —The transition from institutional to family-friendly care for people of retirement age is underway.
124	3.1.2.4.i. Synergistic development of social and occupational rehabilitation services for the promotion of the resilience of people with functional disabilities	Milestone	Description of the occupational rehabilitation service adopted	Adoption of a description of the occupational rehabilitation service standard	N/A	N/A	N/A	Q1	2023	The Advisory Council of the State Agency for Social Integration has adopted the description of an occupational rehabilitation service, which it will coordinate, that promotes the maintenance, renewal and acquisition of new education or skills for re-employment as soon as possible, promoting the safety of customers.
125	3.1.2.4.i. Synergistic development of social and occupational rehabilitation services for the promotion of the resilience of people with functional disabilities	Milestone	Adaptation of building infrastructure, including promotion of environmental accessibility and energy efficiency, and improvement of the technical and material equipment	Adaptation of 2 buildings where the infrastructure shall be improved, including environmental accessibility and energy efficiency, and the improvement of the technical and material equipment	N/A	N/A	N/A	Q1	2024	The infrastructure and logistical equipment have been improved in buildings where services shall be provided to promote the resilience of people with functional impairments, including:   — measures to adapt the environment of the building (Slokas iela 61, Jūrmala), including universal design requirements (width of doors, contrast colours, controls, instructions, pans, etc.), indoors and outdoors, improved safety features (evacuation solutions, construction of fire protection, lightning protection and ventilation systems), replacement of lifts, etc., and modern equipment for the training of persons with tailor made approach;   — Increased energy efficiency in the building (Dubultu Prospectus 71, Jūrmala) by insulation of base and caps, facades and end walls, roof and ventilated floors.
126	3.1.2.4.i. Synergistic development of social and occupational rehabilitation services for the promotion of the resilience of people with functional disabilities	Milestone	Adoption of a new standard for social and professional rehabilitation services for the promotion of the resilience of people with functional impairments have been established and approved	Two new rehabilitation service standards are approved	N/A	N/A	N/A	Q2	2025	State Agency for Social Integration has approved a new service standard for synergistic social and professional rehabilitation services for the promotion of the resilience of people with functional impairments (competence development programme and occupational rehabilitation service), including through the adoption of services in pilot projects and the use of the material base of the project.
127	3.1.2.5.i. Participation in the labour market of unemployed, jobseekers and people at risk of unemployment	Milestone	A retraining and up-skilling offer, with a focus on digital skills, has been established to clients (unemployed, jobseekers, persons at risk of unemployment) of the State Employment Agency for the job-rich recovery of the economy by implementing active labour market policy measures	Adoption of a new retraining and upskilling offer (including digital skills) for the State Employment Agency clients	N/A	N/A	N/A	Q2	2023	An offer of retraining and up-skilling programmes to clients of the Latvian Employment Service (unemployed, jobseekers, persons at risk of unemployment) has been adopted at the meeting of the Latvian Training Commission in accordance with the measures of active labour market policy for the recovery of the job-friendly economy.
128	3.1.2.5.i. Participation in the labour market of unemployed, jobseekers and people at risk of unemployment	Milestone	Development of digital tools for skills assessment	Digital tools developed and implemented	N/A	N/A	N/A	Q4	2023	State Employment Agency has developed and implemented digital assessment tools for an improved skills profiling system, which shall ensure the assessment of the skills and competences of the agency clients, to complete an appropriate offer of retraining and acquisition of skills, depending on the individual’s level of knowledge and skills. The client profiling method currently used by the agency shall be supplemented by digital skills assessment tools (tests) and the results of the tests shall be used in the client career advice process and in the preparation of the individual training offer.
129	3.1.2.5.i. Participation in the labour market of unemployed, jobseekers and people at risk of unemployment	Target	Unemployed, jobseekers, people at risk of unemployment with improved skills	N/A	Number	0	10 000	Q1	2025	10 000 unemployed, jobseekers, people at risk of unemployment with improved skills as certified by State Employment Agency client accounting system
130	3.1.2.5.i. Participation in the labour market of unemployed, jobseekers and people at risk of unemployment	Target	Unemployed, jobseekers, people at risk of unemployment with improved skills	N/A	Number	10 000	20 450	Q3	2026	20 450 unemployed, jobseekers, people at risk of unemployment with improved skills as certified by State Employment Agency client accounting system

 D. COMPONENT 4: HEALTH

This component of the Latvian recovery and resilience plan contributes to addressing the challenges related to the resilience, accessibility, quality and cost-effectiveness of the health system and its human resources. Timely and equal access to healthcare is limited, especially for vulnerable groups. Latvia reports high unmet needs for healthcare and significant out-of-pocket payments. Unhealthy lifestyles are another important reason for the poor health outcomes. The shortage of health workers hinders the provision of public health care and threatens the success of health care reforms. These challenges have been exacerbated in particular by the crisis caused by the COVID-19 pandemic.

The objectives of the component are to improve the resilience and accessibility of health care by (i) developing a framework and necessary infrastructure for the provision of integrated health services, ensuring the capacity of health institutions to adapt to crisis situations, (ii) developing improved service delivery models and (iii) improving the provision of human resources and the professional development system for health professionals.

The component supports addressing the Country Specific Recommendation to strengthen the resilience and accessibility of the health system including by providing additional human and financial resources (Country Specific Recommendation 1, 2020) and to increase the accessibility, quality and cost-effectiveness of the healthcare system (Country Specific Recommendation 2, 2019).

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

Description of the reforms and investments for non-repayable financial support

Reform 4.1.1.r: Sustainability and resilience of a human-centred, comprehensive, integrated healthcare system.

The objectives of the measure are to develop a human-centred, comprehensive, integrated healthcare system and ensure its sustainability and resilience.

The reform consists of the development of new models for the delivery of effective integrated health services at all levels of healthcare (primary, secondary and tertiary). The reform aims to develop integrated care recommendations and an epidemiological safety framework.

An investment strategy defining infrastructure investment needs shall be prepared by 31 December 2022. The reform shall also contain assessments of the provision of hospital services according to the hospital level and the mapping of hospital services. These elements together with the integrated care recommendations and epidemiological safety framework are prerequisites for the planned investments in the hospitals and secondary outpatient settings as per the investment: 4.1.1.2.i. and 4.1.1.3.i..

In the field of oncology, the measure shall ensure the introduction of uniform treatment guidelines by setting up and preparing for certifying a Latvian cancer care centre, as well as ensuring joint management, treatment and care, and establishing a network of hospitals specialising in the treatment and care of oncological patients.

The investments in the genome project shall create, in accordance with the European “1+ Million Genomes” (1+MG) initiative, a representative collection of reference genome data of Latvian citizens, collecting genetic data samples donated by Latvian citizens. It aims to strengthen Latvia’s genetic research and digital capacity in order to facilitate secure matching and analysis of these data within the framework of the European 1+MG infrastructure.

With a view to promoting integrated and patient-centred healthcare, improving the accessibility, quality and resource efficiency of health services, a Digital Health Sector Strategy shall be developed in cooperation with the World Health Organisation. This strategy shall serve as a way forward to develop and deploy digital solutions in the health sector that are safe and meet the needs of the industry and its users.

The reform shall be implemented by 31 August 2026.

Investment: 4.1.1.1.i. Support for public health research.

The objective of the measure is to improve the planning and implementation of the public health policy, including to ensure epidemiological safety through the development of patient-centred sustainable integrated health services.

The investment consists of three studies. (i) In the area of the antimicrobial resistance, a study to identify the most effective methods of intervention and monitoring. (ii) A study to identify the reasons for non-vaccination to ensure a wider coverage of vaccination and reduce the risk of spreading infectious diseases in Latvia. (iii) A study on the risks of spread of infectious diseases and their impact on public health indicators.

The key findings of these studies are expected to serve as the basis for improvements of the public health policy. Based on these findings changes are expected in regulatory framework, methodology and recommendations.

The investment shall be implemented by 31 August 2026.

Investment: 4.1.1.2.i.: Support for strengthening the health infrastructure of university and regional hospitals

The objectives of the measure are to strengthen the resilience of the health sector and the availability of services by developing the necessary infrastructure for integrated health services, ensuring the capacity of health institutions to adapt to crisis situations, and ensuring continued sustainable and high-quality state-funded health services. Investments in hospital infrastructure shall help to improve the availability of both outpatient and in-patient services.

The investments are planned to be made in three clinical university hospitals and seven regional hospitals for improving their infrastructure and equipment. Investments shall be based on recommendations for integrated care and epidemiological safety requirements and in accordance with the investment strategy for the development of health care infrastructure for 2021-2029. Investments shall be provided for the renovation, refurbishment and construction of new premises as well as for the procurement of the medical technologies and equipment.

The investments to ensure the integrated healthcare approach and make the necessary adaptions for epidemiological safety shall be made in three clinical university hospitals: Riga Eastern Clinical University Hospital, Paula Stradiņa Clinical University Hospital and Children’s Clinical University Hospital and seven regional hospitals: Liepaja Regional Hospital; Daugavpils Regional Hospital, Rēzekne Hospital, North Kurzeme Regional Hospital, Jēkabpils Regional Hospital, Vidzeme Hospital and Jelgava Hospital.

The investment shall be implemented by 31 August 2026.

Investment 4.1.1.3.i. Support for strengthening health infrastructure of secondary outpatient service providers

The objectives of the measure are to improve the infrastructure of secondary outpatient service providers to ensure the provision of integrated services, epidemiological safety, and environmental accessibility.

The investment consists of investments in infrastructure and equipment for at least 40 secondary outpatient healthcare service providers. These investments shall be made in accordance with the recommendations for integrated care and epidemiological safety requirements, as well as investment strategy for the development of health care infrastructure for 2021-2029.

The investment shall be implemented by 31 August 2026.

Reform 4.2.1.r.: Provision of human resources and upskilling.

The objectives of the measure are to improve the human resources management and upskilling in the health sector.

The reform consists of the development of a human resources strategy that includes a comprehensive approach to the health workforce planning and lifelong learning model, coordination mechanism for training and a simulation approach in training. The human resources strategy for the health sector shall be based on a mapping of human resources.

The strategy shall cover such actions as the development of a new salary model, the provision of basic medical training and the number of residence places in line with demand, retention measures as well as the development of a human resources database. The reform shall also establish a framework to strengthen the medical education system, providing for the introduction of a sustainable model for continuing education and a coordination mechanism to ensure and monitor the quality of educational content, as well as a simulation approach at all levels of education. An IT tool for forecasting the future needs of health workforce shall be developed.

The reform shall be implemented by 31 December 2024.

Investment: 4.2.1.1.i. Support for the implementation of the human resources development system.

The objectives of the measure are to develop a common approach for continuous education in health, and introduce a simulation approach in the health education system.

The investment consists of the establishment of a coordination mechanism and covers aspects such as methodological management, quality control of the education content, sustainable financing. The investment shall also ensure the development of an action plan for the implementation of a simulation approach in the training process for medical practitioners. The approach shall allow to simulate different real life situations, thus enabling future and existing medical professionals to further develop their skills.

The investment shall be implemented by 31 August 2026.

Reform: 4.3.1.r.: Sustainability of health care, strengthening governance, efficient use of health resources, increase of total public budget in the health sector.

The objectives of the measure are to improve the efficiency of the provision of state-funded health services by ensuring the availability of services, and establishing a systemic change mechanism for state-paid services.

The reform consists of the establishment of a service laboratory system for testing and evaluating different service models. The measure shall cover the examination of the current situation, identification and assessment of the challenges, and development of the solutions such as the new service models. The new service models shall be piloted and compared with the existing service. The short and long-term benefits and efficiency gains of the models shall be assessed. Based on the results, 10 new service models are expected to be piloted and evaluated for mainstreaming and implemented as part of the state paid service basket.

The reform shall be implemented by 31 August 2026.

Investment: 4.3.1.1.i.: Support for assessing and improving the quality and accessibility of non-hospital secondary healthcare.

The objective of the measure is to identify the weak spots in the provision of the state paid outpatient services.

The investment consists of a study on the quality and accessibility of state paid outpatient services, mapping of comprehensive non-hospital care needs and challenges linked to the implementation of the administrative territorial reform as well as the development of policy recommendations.

The investment shall be implemented by 31 December 2024.

D.2.    Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

 E. COMPONENT 5: ECONOMIC TRANSFORMATION AND PRODUCTIVITY REFORM

This component of the Latvian recovery and resilience plan consists of two subparts addressing the key challenges in innovation and higher education, respectively. The key innovation-related challenges are the low innovation investment, particularly in the private sector, weak science-business links, the shortage of highly skilled human resources, and the fragmentation of innovation system governance. The key higher education -related challenge is a fragmented higher education landscape, comprised of a relatively large number of small institutions whose funding is both insufficient and ineffective. This means most higher education institutions (HEIs) lack resources to deliver good quality education and to create critical mass for high quality research. Moreover, there is a suboptimal university governance model with a poor representation of external stakeholders and a lack of attractive academic career opportunities, limiting human resources for education, research and innovation.

The objectives of the component are to increase productivity through higher R&D investments, boost competitiveness and foster cooperation between the public sector, businesses, academia and research institutions. The changes to the governance of the innovation system and their accompanying support schemes for private R&D investments are aimed at creating sustainable innovation ecosystems thereby fostering higher overall investment in innovation. The broad-ranging reform of the higher education aims to boost the quality and efficiency of higher education, the competitiveness of Latvia’s research and to deliver better skills to Latvia’s population in the long term. 

The component supports addressing the Country Specific Recommendations to focus investment-related economic policy on innovation (Country Specific Recommendation 3, 2019, Country Specific Recommendation 3, 2020) and to increase the quality and efficiency of education and training (Country Specific Recommendation 2, 2019).

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

E.1.    Description of the reforms and investments for non-repayable financial support

Reform 5.1.r.: Innovation system governance and private R&D investment motivation

The objective of the measure is to introduce an ecosystem approach in innovation governance. It aims to introduce a support instrument that shall enable increased R&D capacity in enterprises, promote cross-sectoral cooperation, increase the share of innovative enterprises and thereby promote increased private investment in innovation.

The reform consists of the creation of an innovation governance model which shall mean assigning specific tasks to the involved institutions representing the government, the industry and the academia. The key tasks of the innovation system shall be strategy determination, management of innovation fund, data gathering, performance measurement and monitoring, as well as periodical re-assessment of the governance model.

The reform shall be implemented by 31 December 2022.

Investment: 5.1.1.1.i. Development and continuous operation of a fully-fledged innovation system governance model

The objective of the measure is to develop a model for the governance of the innovation system and its continuous operation. The investment focuses on improving the governance of the innovation system, which is based around regional innovation smart specialisation strategies (RIS3) in five areas – (a) knowledge-intensive bio-economy, (b) biomedicine, bio-pharmacy, and medicine technologies, (c) smart materials, technologies and systems, (d) information technologies, and (e) smart energy. The objectives of the measure is to develop value chain ecosystems in the RIS3 areas involving all representatives from the government, the industry and the academia. It aims to promote the development of new products and technologies and the knowledge transfer within the economy, contributing to the transformation of the economy towards higher value added.

The investment consists of the establishment of an innovation governance model that ensures a coordinated approach to implementation of innovation fund as well as monitoring of innovation performance. The investment shall lead to changes in the design and implementation of innovation policy in the RIS3 areas – the way in which the public administration is involved and functions. The measure shall ensure the transition of the RIS3 governance model to an ecosystem approach, as well as improve the flow of information and cooperation between stakeholders (including public authorities responsible for innovation policy and implementation of support instruments). New management methods shall be developed, tested and evaluated and new procedures shall be established. Three annual analytical reports for 2023 – 2025 in each RIS3 area shall be carried out, including performance of the innovation support programme, as well as recommendations for possible programme improvements.

The investment shall be implemented by 31 August 2026.

Investment: 5.1.1.2.i.: Instrument to support the development of innovation clusters

The objective of the investment is to increase the volume of private R&D investments through targeted public investments that shall promote the development of new products and technologies, as well as knowledge transfer within the economy.

The investment shall create an instrument for the development of innovation clusters that would develop R&D capacity in enterprises, promote cooperation between the government, the industry and the academia in the innovation process and increase the share of innovative enterprises in the economy, thereby promoting the volume of private research & development investments and the return on public investment.

The investments shall cover the consolidation of 15 clusters and 8 competence centres into five innovation clusters, one in each of RIS3 specialization areas. Emphasis shall be placed on building complete innovation ecosystems, covering existing cooperation networks, ensuring strategic specialisation and innovation development within the entire local value chain, which shall ensure closer integration of Latvian enterprises into global value chains. The newly created Innovation Clusters shall be tasked with the (i) implementing the support programme for private research and development projects, (ii) export promotion activities, (iii) networking and exchange of experience activities, (iv) implementation of support programme for participation in EU-level research programmes and international cooperation networks, (v) implementing the support programme for the involvement of Latvian enterprises in industrial alliances at EU level and planned IPCEIs and (vii) collecting data from the beneficiaries to inform the assessment and monitoring activities.

The investment shall ensure the development of new innovative products and shall cover such expenses as industrial research, experimental development, feasibility studies, co-financing for participation in European and international R&D projects. The funding shall be ensured for participation in planned Important Projects of Common European interest (IPCEI) projects, including in the fields of next generation cloud and edge computing. Latvian Investment and Development Agency shall determine the most suitable project(s) for participation and shall include appropriate provisions in the action plan attached to the implementation of this measure.

The investment shall be implemented by 31 August 2026.

Reform 5.2.1.r.: Reform of Higher Education and Scientific Excellence and Governance

The objectives of the reform are to increase the international competitiveness of higher education institutions.

The reform concerns structural changes in three pillars: (i) the governance through establishing a separate academic and strategic decision-making, involving external members; (ii) funding that shall be allocated according to the results achieved according to national priorities and higher education institution typology objectives; and (iii) human resources by developing a new and unified career model for academic and scientific staff in line with best global practice, promoting the attraction and retention of global staff, especially the diaspora in Latvia.

By 31 December 2022, the measure shall ensure the entry into force of the regulatory framework for implementing the reform of the governance of the higher education system covering (i) higher education institution typologies and criteria for qualifying for a particular type; (ii) the procedure for the establishment and approval of higher education institution councils, the competence of the councils, while clarifying the competences of the Senate, the Rector and the Constitutional Assembly; (iii) the procedure for selecting and approving new university reactors; (iv) defining the strategic specialisation of higher education institutions .

By 30 September 2023 at least four consolidation plans of institutions of higher education shall be approved and eligible for consolidation grants (investment: 5.2.1.1i. Research, development and consolidation grants).

By 31 December 2024, the measure shall ensure the entry into force of legal provisions (i) introducing a new doctoral model; (ii) introducing cyclical institutional accreditation of higher education institutions and colleges; (iii) further development of the financing model for higher education and (iv) linking public funding to the results of the international evaluation of scientific institutions.

By 31 August 2026, all state-founded higher education institutions shall implement the new governance model, including changes to the internal governing bodies, established the criteria for election of the rector in accordance with the requirements of the law, appointed a management team.

Investment: 5.2.1.1.i. Research, development and consolidation grants

The objectives of the investment are to reduce the number of higher education institutions and scientific institutes through consolidation. The plan shall finance grants that shall incentivise higher education mergers, which shall help concentrate the scarce resources both in higher education and academic research.

The approved consolidation plans of the higher education institutions shall include an investment plan. This may cover grants for structural change; exit grants for termination of employment with academic staff over 65 years of age; digitalisation, technological development, improvement of research and education infrastructure (excluding construction) and creation of new programmes of excellence.

The investment may cover grant agreements concluded by the universities or research institutes for doctoral grants, post-doctoral grants or scientific (professor) grants as well as in-house research grants.

The investment shall be implemented by 31 August 2026.

E.2.    Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support

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 F. COMPONENT 6: RULE OF LAW

This component of the Latvian recovery and resilience plan consists of four subparts that address the key challenges in tax compliance, law enforcement dealing with economic crime, public administration and public procurement. The key addressed challenges related to tax compliance are undeclared wages and employment, tax fraud, and smuggling. The key challenges related to economic crime are shortage of investigators, prosecutors and judges with specific knowledge in areas of economic crime. Key challenges related to public administration are the need to strengthen and improve its capacities, efficiency, transparency and accountability. While overall, Latvia’s performance in the area of public procurement is satisfactory, there are several challenges that require further attention, namely the need to increase the efficiency, transparency and quality of public procurement procedures, foster the competition and strengthen human and analytical capacities, including, professional qualifications of procurers.

The objectives of the component are to reduce the shadow economy and foster a fairer business environment, to improve the quality and efficiency of the judicial system, particularly with respect to fighting economic crime, to modernise the public administration as well as to improve the quality, efficiency and integrity of public procurement.

The component supports addressing the Country Specific Recommendations to improve tax compliance (Country Specific Recommendation 1 2019), to strengthen the accountability and efficiency of public administration (Country Specific Recommendation 4 2019), and to continue progress on the anti-money laundering framework (Country Specific Recommendation 4 2020).

It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01).

F.1.    Description of the reforms and investments for non-repayable financial support

Reform: 6.1.1.r. Strengthening analytics and developing data management in the field of tax administration and customs

The objective of this measure is to improve the quality and efficiency of compliance risk management and other activities related to fight against shadow economy through a broad set of measures, including the adoption of a comprehensive action plan for fighting the shadow economy, introducing a new taxpayer segmentation system and adjusting the audit and control practices to better target the risk of non-compliance. The measure also includes investment in research of taxpayer behaviour that shall be used to design a more effective policy response to tax avoidance and evasion.

The reform consists of: a) adoption of a national work plan to restrain the shadow economy for 2021 – 2022, b) the establishment of a taxpayer rating system and the related optimisation of audits and controls and tailoring of state revenue service (SRS) services, c) development of a handbook for recognising risks of undeclared wages, d) commissioning of research and policy recommendations in the area of the shadow economy.

The reform shall be implemented by 30 June 2024.

Investment: 6.1.1.1.i. Modernisation of existing analytical solutions

The objective of this measure is to migrate existing risk systems to a single analytical platform and to modernise individual taxpayers’ risk system and the excise tax risk system.

The investment consists of a) the implementation of a System of Risks for Individual Taxpayers, b) the implementation of Excise Tax Risk Management System, and c) the transfer of the ESKORT system to the SAP HANA database.

The investment shall be implemented by 30 June 2024.

Investment: 6.1.1.2.i. Development of new analytical systems

The objective of this measure is to implement a new taxpayer segmentation system, ensure its integration with the 360 degree system of taxpayer analysis and ensure its integration with the database of publicly available information.

The investment consists of the implementation of an IT system for taxpayer segmentation according to their compliance risk, including integration with a published database and data visualisation in the Electronic Declaration System, b) integration of the new system with the 360 degrees analysis of the taxpayer.

The investment shall be implemented by 30 June 2024.

Investment: 6.1.1.3.i. Personnel training to work with an analytical platform and consultancy

The objective of this measure is to provide training for SRS specialists to work with the SAP HANA technology platform.

The investment consists of training 50 SRS specialists for working with SAP HANA platform. The training shall be aimed at risks analysts and system administrators.

The investment shall be implemented by 31 December 2023.

Reform: 6.1.2.r. Remote and centralised analysis of images scanned at customs control points

The objective of this measure is to link x-ray scanners for railway cargo placed at customs control points in Karsava and Indra with a single analysis system placed in Riga allowing for centralized remote image analysis.

The reform entails ensuring 95% of cargo image analysis is carried out remotely through the BAXE system.

The reform shall be implemented by 31 August 2026.

Investment: 6.1.2.1.i. Linking railway x-ray equipment to Baxe and use of artificial intelligence for rail freight scanning image analysis

The objective of this measure is to ensure the ability to perform analysis of railway cargo images scanned at customs control points Indra and Karsava remotely.

The investment consists of a) connecting railway scanners at customs control points in Indra and Karsava to BAXE information system and b) developing an x-ray image analysis platform employing artificial intelligence.

The investment shall be implemented by 31 December 2024.

Investment: 6.1.2.2.i. Capacity building of the Customs Laboratory

The objective of this measure is to allow the customs to control smuggling, counterfeit products and illegal substances more effectively.

The investment consists of equipping the customs laboratory and the customs control point at Riga airport with a spectrophotometer.

The investment shall be implemented by 31 December 2022.