Background information

Altum, a state-owned development finance institution, is offering a loan for company energy efficiency and implementation of renewable energy projects. The loan can be used to improve companies' energy efficiency, including:

• Modernisation of heating systems.
• Modernisation of existing production facilities.
• Modernisation of transport.
• Modernisation of ventilation, drying, heat, cold, steam production equipment, dryers, motors, pumps.
• LED lighting.
• Electricity supply equipment as well as other energy consumers.
• The installation of renewable energy systems.

Content of measure

The applying company and its owner must have no up-to-date records of debts in the bank of Latvia's credit register, other debtors' registers, and no current tax debt to the state revenue service.

Companies are not eligible if they meet the criteria for opening insolvency proceeding, or they have been declared insolvent by a court.

The loan is especially relevant for companies if energy consumption is a significant cost item and exceeds €20,000 per year, for example for:

• Food producers, woodworking and metalworking companies.
• Shopping and sports centres, warehouses, hotels, office buildings.
• Large companies and large energy consumers affected by the energy efficiency act.

A company might use the loan to refinance existing projects or to purchase used equipment. The loan conditions are:

• Amount may be up to €2,850,000 and up to 85% of total project cost.
• Duration from 5 to 14 years.
• To be repayable through project saving.
• Absence of collateral - security is an option.

Funding for ALTUM comes from an €18 million loan from the European Investment Bank and from €3 million guarantees from the private finance for energy efficiency (PF4EE) instrument. Some other funding comes from green bonds issued by ALTUM itself.

Use of measure

The loan programme is in place since 1 November 2017. Up to July 2020 there were 45 approved loans for total amount around €20 million, the smallest approved project is €11,500, the largest approved amounts to €2,850,000, while the average project size is €497,000.

For example, wood processing company Erte Grupa has invested close to €1 million in improving energy efficiency, of which €471,000 have been received in the form of a loan from the development financial institution ALTUM. The launched energy efficiency project covers a third of the company's total technological capacity and will reduce energy costs per production unit by up to 35%.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government	European Funds National funds Other

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	No involvement as case not in social partner domain	No involvement as case not in social partner domain
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Unknown

Involvement

No involvement

Views and reactions

Unknown

Sources

• 09 October 2017: Latvian development Finance Institution Altum will issue EUR 20m Green bonds (www.altum.lv)
• 27 February 2020: ALTUM and EIB join forces for energy efficiency investments in Latvia (www.altum.lv)
• 04 June 2020: ALTUM support allows to improve the energy efficiency of the plant (labsoflatvia.com)
• 21 October 2022: Loan for energy efficiency of companies (www.altum.lv)