SJSC “State Real Estate” (SRE) informs that nine municipalities have been selected for the first lot of the private-public partnership (PPP) programme “Rental Housing for Latvian Professionals” in cooperation with the European Investment Bank and the assigned international experts. In parallel, municipalities are continuing to move towards the construction of affordable rental housing in the subsequent lots in cooperation with the Council of Europe Development Bank which will guarantee the attraction of investments and the construction of housing throughout Latvia, according to Renārs Griškevičs, the Chairperson of the Board of the SRE.
The goal of the programme “Rental Housing for Latvian Professionals” is to create modern, energy-efficient and affordable housing tailored for young professionals and their families in sectors important to Latvia both at national and municipal level (i.e. teachers, firefighters, police officers, military personnel, state and municipal employees, etc.). Taking into account the solvency of residents and market conditions, joint municipal and national efforts will be required to co-finance rental housing.
At a further programming phase, detailed financial and economic calculations for possible participation in the first lot will take place in nine cities, i.e. in Cēsis (number of apartments applied – 100) at 45 Festivāla Street, in Daugavpils (120) at 103 Nometņu Street, in Jēkabpils (140) at 3B Celtnieku Street, in Liepāja (200) at 136B Klaipēdas Street, in Rīga (173) at Tīnūžu Street, in Tukums (150) at 54 Smilšu Street, in Valmiera (150) at ‘club’ (no address), in Ķekava (48) at 2A Nākotnes Street and in Gulbene (48) at 2 Malienas Street. Overall, detailed financial and economic calculations are intended to determine the potential for building 1129 affordable rental apartments in these municipalities. The advisory partners of the programme, the European Investment Bank (EIB) and their contracted advisors, bring together an international team from across Europe with expertise and experience in the development of such projects. Evaluation of several programme implementation models, proposing the most appropriate model for the specific situation of Latvia, analysis of institutional capacity at both national and municipal level, development of the project selection strategy and launch of a pilot project were among the tasks completed in cooperation with the EIB.
“For middle-income households, affordable, high-quality and energy-efficient housing is a key element to ensure that teachers, police officers and other professionals choose to pursue their careers and build their future in Latvia’s regional centres. I am therefore pleased that we have taken a significant step closer to the construction of 1129 new rental apartments in nine cities across Latvia. Municipalities, the SRE and the EIB experts will be actively working together until June to prepare detailed calculations and the required construction documentation for the implementation of this important PPP programme,” says the Minister for Finance Arvils Ašeradens. “PPP projects are an effective way to attract the necessary finances for important public objectives, even in economically difficult times. This is also an opportunity for professionals across various municipalities in Latvia not only to acquire new knowledge about long-term project management and financing, but also to develop their cooperation skills while being part of international teams.”
“Since last October, when municipalities signed the letter of intent to join the programme, we have been working intensively, dozens of regular face-to-face and virtual meetings were organised with stakeholders and international experts, resulting in the selection of the most suitable programme model in the context of Latvia, as well as nine highly prepared municipalities and land parcels for the implementation of the programme in the first lot. According to financial and economic calculations, it is expected that agreements with municipalities will be signed at the end of summer this year. Furthermore, in the coming month the advisory service agreement is to be signed with the Council of Europe Development Bank for the implementation of the programme in the second and third lots in the remaining municipalities,” says Renārs Griškevičs, the Chairperson of the Board of the SRE.
“The European Investment Bank has worked closely with Latvian authorities and consultants to identify affordable housing projects based on good practices from across Europe. These projects will now be prepared for PPP procurement over three phases. Our collaboration aims to address the challenge of investing in affordable housing, contributing to Latvia’s long-term sustainability and economic growth,” says Diarmaid Kehoe, Senior Advisor from EIB Advisory.
As reported, a letter of intent for the construction of affordable rental housing for professionals in 13 cities across Latvia was signed in 2024 by the SRE acting as a national representative for the implementation of the programme in Latvia. Currently, 18 cities across Latvia have expressed interest in participating in the programme.
According to the decision adopted by the Cabinet of Ministers on 11 June 2024, the implementation of the programme in Latvia has been delegated to the SRE. The agreement on the necessary financial and economic calculations and provision of advisory services was signed between the SRE and the EIB in July 2024. For Latvia, this is the first advisory service agreement of such scale signed with the EIB, allowing also international institutional investors to finance the construction of affordable rental housing. At the end of the year, the EIB assigned international advisors and started working actively to prepare calculations and move towards implementation of the programme through close cooperation with the SRE and municipalities.
The project is developed according to the ‘design-build-finance-maintain-operate by private partner’ model and starting from 2030 the public sector availability payment will be included in the national and municipal budgets alongside the availability of housing to residents. In addition, the programme provides that at the end of the project, municipalities acquire ownership of the land and the constructed housing units.
Currently, 110 projects with a total investment of EUR 410 million are being implemented under the guidance of SJSC “State Real Estate”. The SRE provides professional real estate management and maintenance for 419 building and structure properties, comprising 1049 buildings with a total area of 0.98 million square metres and also the land beneath structures with a total area of 585 hectares, and 3385 land properties with a total area of 937 hectares. The SRE is one of 17 Latvian companies that in 2023 received the highest platinum award as part of the Sustainability Index of the Institute of Corporate Responsibility and Sustainability, confirming the good governance and sustainability of its operations. The company was founded in 1996, the state holds 100% ownership and the Ministry of Finance is the holder of capital shares.
