Ministry of Economics Develops New Support Programme to Promote the Renovation of Multi-Apartment Buildings

On Tuesday, 10 November, the Cabinet of Ministers approved a new support programme developed by the Ministry of Economics to improve the energy efficiency of multi-apartment residential buildings. Under the programme, apartment owners will be eligible for state support in the form of an annual loan interest rate subsidy of 1.6 to 2 percentage points, significantly reducing the cost of borrowing for building renovation and providing support to up to 9,000 households.

The new support instrument will become available on 4 January 2027, ensuring a smooth transition to a new support model for applicants who could not obtain funding under the existing EU-funded support programme. Priority invitations will be extended to applicants whose projects are already on the waiting list for the existing programme and meet the relevant eligibility requirements.

The new programme aims to ensure uninterrupted support for building renovation during the period before the next European Union (EU) funding programming period. Drawing on experience from previous programmes and taking into account rising renovation costs, a more sustainable financing model is being introduced, combining the reinvestment of public funding with financing from commercial banks.

“The previous support model, based on one-off grant programmes, has largely exhausted its potential. We need to think in the long term about how to achieve the most effective results with the public funding available. The new model will allow us to reinvest 70% of previously allocated and repaid public funding into the renovation of additional buildings, while also attracting capital from commercial banks,” emphasises Viktors Valainis, Minister of Economics.

The support will be administered by the development finance institution ALTUM. Apartment owners will be able to obtain renovation loans from commercial banks or other financing providers that have entered into cooperation agreements with ALTUM.

Loans will benefit from an ALTUM interest rate subsidy and a guarantee covering up to 80% of the loan amount attributable to eligible project costs. The community of apartment owners will be able to choose whether to use the subsidy to cover interest payments or partially repay the loan principal.

The annual interest rate subsidy will be:

• 1.6 percentage points for standard building renovation projects;

• 1.8 percentage points for buildings in the Latgale Planning Region and projects involving the simultaneous renovation of at least three buildings within the same residential neighbourhood;

• 2 percentage points for buildings renovated using prefabricated timber-frame panels.

Support will be available for multi-apartment residential buildings in Latvia containing at least two apartments. Projects must achieve primary energy savings of at least 30%.

Eligible activities will include thermal insulation, renovation of building engineering systems and other works related to building renovation.

“Banks are ready to actively finance the renovation of multi-apartment buildings. We recognise that support for building insulation cannot continue at the same level as before. Therefore, the proposed solution is a satisfactory response to the current circumstances, allowing support for building renovation to continue between EU funding programming periods.

At the same time, both the continuity and adequacy of support are essential. Clear and stable support conditions are a prerequisite for building managers, banks and construction companies to plan their activities several years ahead,” emphasises Uldis Cērps, Chairman of the Management Board of the Finance Latvia Association.

The new model will also enable communities of apartment owners that were unable to secure funding under the previous support programme to proceed with their renovation plans.

To apply, apartment owners will first need to select a financing provider and obtain a loan offer. A representative of the community of apartment owners must then submit the required documentation to ALTUM.

The renovation project must be completed within 36 months of ALTUM’s decision to award the subsidy.

A total of EUR 14.4 million from the EU funds for the 2021–2027 programming period has been allocated to implement the programme.

Additional resources will come from public funding currently held by ALTUM and funds expected to be recovered from previous support programmes. The total amount of this funding is projected to reach up to EUR 34.3 million by 2042.

Unlike traditional grant programmes, the new model provides for the reinvestment of public funds. Repayments of previously issued loans will gradually become available to ALTUM, enabling these resources to be used to support new energy efficiency projects.

By 2030, the new support model, under which approximately 70% of total funding will consist of reinvested resources, is expected to support at least 9,000 apartment properties. This includes 2,900 apartment properties supported through the EUR 14.4 million allocated from the EU funds for the 2021–2027 programming period.

---

Ministry of Economics
Public Relations Division
Email: san@em.gov.lv