Latvia swaps grants for interest subsidies to renovate apartment blocks from January

Latvia's cabinet on Tuesday, 10 November, approved a new Economics Ministry scheme to make apartment blocks more energy efficient. Instead of the grants used until now, flat owners will get an interest rate subsidy of 1.6 to 2 percentage points a year on their renovation loans. The scheme opens on 4 January 2027.

How it will work

It will be run by Altum, the state development finance institution. Flat owners will take renovation loans from commercial banks or other lenders that have signed a cooperation agreement with Altum. The loans will carry Altum's interest subsidy and a guarantee covering up to 80% of eligible costs. Each owners' association will choose whether to use the subsidy for interest payments or to pay off part of the principal.

• 1.6 percentage points a year for standard projects;
• 1.8 points for buildings in the Latgale planning region and for projects renovating at least three buildings in the same block;
• 2 points where factory-made timber-frame panels are used.

Buildings with at least two flats can apply, and projects must cut primary energy use by at least 30%. Insulation, renewal of building systems and other renovation work qualify. The owners choose a lender and get a loan offer, then their representative applies to Altum with the documents. Projects must be completed within 36 months of Altum's decision. Buildings already in the queue of the previous programme that meet the requirements will be invited first.

Money that comes back

The scheme has €14.4 million from EU funds for 2021-2027, plus money Altum holds and is being repaid from earlier programmes, expected to reach up to €34.3 million by 2042. “The new model will let us reinvest 70% of previously granted and repaid public funding in renovating new buildings, while bringing in capital from commercial banks,” Economics Minister Viktors Valainis said.

Uldis Cērps, chairman of the Finance Latvia Association, called the offer “a satisfactory solution in the circumstances”, as support on the previous scale was no longer possible, but said building managers, banks and builders needed clear and stable conditions several years ahead.