Heating aid for businesses to be decided at end of August in Latvia

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The government is discussing support solutions for entrepreneurs facing rising energy costs. The Economics and Finance ministers have agreed on specific directions, and additional conditions will continue until the government meeting at the end of August, Latvian Radio reported on August 16.

 It is intended to implement a complete cancellation of the compulsory procurement component (OIK) until the end of 2023 and to fully compensate for the costs of the distribution tariff. Additional aid is planned for energy-intensive companies where energy costs constitute at least 10% of the total costs. 

The planned program of support measures for economic operators is similar to that in force during the Covid-19 restrictions. The system is aimed at preventing high unemployment and the economy from falling into recession, said Finance Minister Jānis Reirs.

At the same time, the responsible ministries will also prepare other support measures to maintain competitiveness

Aigars Rostovskis, president of the Latvian Chamber of Commerce and Industry, said that these measures are urgent but it is not good that they will be implemented on the basis of borrowed money. “Everything is right: the holes are filled with money. It's money that we as a society will have to repay. Either with higher taxes or slower wage increases, for example,” Rostovskis said.

“We as a society were sitting on, or seated on, Russia's cheap energy resource. We were used to it or lobbied, call it what you wish. Instead, we should have developed our resources in good time. Water, wind, wood, sun, peat. The other thing that is being done in developed countries, that households and businesses can also produce energy, provide for themselves and give to the common network. But it needs a new approach. Now we are doing the right thing by going to this decentralized approach, but it has been done too late. We pay for it as a society,” the President of LTRK said.

The government's promised support measures for businesses could be approved at a meeting at the end of August.

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