On Thursday, April 30, the government in its extraordinary meeting supported the proposal of the Ministry of Finance (MoF) to increase the local government borrowing limit by 150 million euro, in order to mitigate the economic consequences of COVID-19.
The Minister for Finance Jānis Reirs points out: "Our goal is to keep the unemployment rate as low as practically possible. This is our main task during this crisis period. Therefore, it is important to support the economy. This is why we have offered this scheme as one of the measures for warming up the economy.”
By this decision, the borrowing limit of local governments for 2020 is increased by 150 million euro, in order to perform contributions to the high readiness projects relevant to national economy co-financed by the EU Funds and other foreign financial assistance, as well as the investment projects applied for by the Ministry of Environmental Protection and Regional Development (MEPRD).
In these projects, with the approval from the competent line ministry, it will be possible to review the planning of the eligible and non-eligible costs, increasing the amount of eligible costs.
The MEPRD, by May 12, will develop the amendments to the legal framework, prescribing the criteria and procedure, under which local governments would be able to apply their investment projects and become eligible for the options to receive the State budget loan.
At the same time, a positive opinion of the MEPRD will be required with respect to conformity of these projects to the administrative territorial reform and sustainable development of municipalities.
Additional financing will be granted from the loan received from the Nordic Investment Bank (NIB). Local governments will be able to receive the loan from the Treasury under favourable terms for the implementation of projects.
