State support for energy-intensive companies is meant to reduce the cost of mandatory procurement component in final electricity prices for energy-intensive companies.
The Economics Ministry came up with the support mechanism with the objective to improve energy-intensive manufacturing companies' international competitiveness, foster investments and creation of new, well-paid jobs, thereby contributing to the economic growth of Latvia and gradual increase of manufacturing industry's share in the gross domestic product, said Economics Minister Arvils Aseradens.
Pursuant to the agreement with the Commission, the government has endorsed amendments stipulating manufacturing companies' right to reduced mandatory procurement component.
According to the Economics Ministry, this means that, after the amendments are published in the government gazette Latvijas Vestnesis, energy-intensive companies will be able to seek a reduction of up to 85% in mandatory procurement component in their electricity bills, which will improve their competitiveness on European Union and third-country markets where the cost of electricity may be two to three times lower than in Latvia.
Energy-intensive manufacturing businesses will have to submit the required documents to the Economics Ministry and, if they meet the requirements, they will be offered a reduction in the mandatory procurement component amount.
Such companies will have the right to request the cost of mandatory procurement component compensated, starting from July 1, 2015. The Economics Ministry will be accepting applications until October 31 this year.
The Economics Ministry explains that, due to a substantial increase in the cost of electricity in the EU over the past few years, several member states have introduced special support mechanisms for their energy-intensive manufacturing industries. If no such support was provided to Latvian companies, their competitiveness would be significantly impaired as compared to companies in other EU member countries.