Investments
International aid
Financing from the Special budget
Investments
Calculations made in 1999 show that improvement of water
management will cost 580 million LVL, and waste management - 209
million LVL (190 million LVL for municipal waste and 19 million
LVL for hazardous waste management). Large investments are needed
for nature and air protection, regional development, and other
sectors.
The Law On Municipalities states that municipalities are
responsible for water management and waste management. The
municipal resources in Latvia are insufficient to secure this
level of investment for the period until 2015. Therefore, a large
part of environmental infrastructure projects utilize funding from
Public Investment Programme (PIP).
In the year 2000, the Saeima approved the PIP at a level of
171.1 million LVL, but as in previous years, execution of the PIP
was far from the expected, and reached 140.1 million LVL, or 83%
of the planned amount. A total of 72% of the finances, mostly
acquired as credits, were invested in priority sectors of the PIP
- energy, transport and environmental protection.
In 2000, 17% of the State budget resources in the PIP were
allotted for projects in the field of interest of the Ministry of
the Environment Protection and Regional Development. The interests
include water management, municipal and hazardous waste management,
air protection, regional development, tourism infrastructure,
environmental control and monitoring, and nature protection
projects.
Proportion of Public
Investment Programme investments allotted to environmental
protection, 1995-2000
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The level of investments in environmental protection per capita
has risen to 15 LVL in 2000.
Since 1995, when the PIP began and 4.65 million LVL were
invested in environmental protection projects, investments in this
sector have increased by almost eight times - total investments in
the environment sector in 2000 reached 35.62 million LVL; 30% of
these investments were from the State budget (20% General budget
and 10% special budget), 15% was in the form of donations, and 54%
were own resources or credits.
While the amount of investments for improvement of
environmental quality has increased during the past five years,
from 0.6% of the GDP in 1995 to 0.8% in 2000, it still is
significantly below the average in EU countries - 1.5% of the GDP.
By increasing investment from the State budget, from
municipalities, and in the way of donations and credits, it is
planned to increase the proportion of investments in the
environmental sector to at least 1.3% of the GDP by 2006.
Investments in improvement of
environmental quality in relation to the Gross Domestic
Product, 1995-2000
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The largest investments were for water management and municipal
waste management projects: respectively 31.7 million (in 1999 -
24.33 million LVL) and 1.8 million LVL (in 1999 - 1.18 million LVL).
A total of 0.707 million LVL (in 1999 - 0.47 million LVL) were
invested for development of a hazardous waste management system.
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International aid
As environmental infrastructure projects are very expensive and
they have a long repayment period, then foreign aid (e.g. donations)
raises their efficiency.
In 1999, the total international aid for Latvia in environmental
protection amounted to 21.33 million LVL, with most coming from the
EU PHARE programme (10.43 million LVL) and the Danish Environmental
Protection Agency (4.84 million LVL)). In 2000, international aid in
the environmental sector exceeded 30 million LVL.
The largest finances have come from EU funds (e.g. 21.5 million
LVL from the ISPA Fund for water management) and the Danish
Environmental Protection Agency (3.48 million LVL).
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Financing from the Special budget
In 1999, the natural resources tax was calculated for 4,173
taxable objects (for example, water in-take sites, quarries,
landfills, polluting industries, regional boiler houses etc.) in
2000 - for 4,435.
In many countries, particularly in transition economy countries,
the income from environmental taxes is ear-marked as grants and
subsidies to be returned for improvement in the environmental
sector. The Latvian Environmental Protection Fund (LEPF) since
1996 has managed this ear-marked tax.
In 2000, resources of the Latvian Environmental Protection Fund (institution
for management of special budget for environmental protection,
regulated by the Law On Natural Resources Tax) were used in several
subprogrammes: preparation and co-financing of ISPA investment
projects; environmental protection projects; Latvian Museum of
Natural History; management of the Fund.
The most important forms of financing utilized by the Fund are
grants, subsidies and investments. About 2000 project submissions to
the LEPF have been recorded, of which 1299 have received financing.
While the number of LEPF sponsored projects has decreased, they are
associated with greater costs and are more complicated.
Number of projects financed
by the Latvian Environmental Protection Fund, 1997-2000
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Finances for sectoral environmental protection programmes,
projects and actions (grants, subsidies and investments) are
planned within the sub-programme Environmental Protection Projects.
Response indicator
Distribution of financing from the Latvian
Environmental Protection Fund by environmental protection sectors
(1996-2000), LVL and proportion
| Sector |
1996 |
1997 |
1998 |
1999 |
2000 |
Total |
% |
| Air protection |
|
232,758 |
449,047 |
213,350 |
135,810 |
1,030,965 |
3.86% |
| Water protection |
34,264 |
1,405,148 |
2,231,998 |
1,356,066 |
2,601,641 |
7,629,116 |
28.54% |
| Waste management |
1,300 |
552,711 |
1,848,847 |
2,831,835 |
2,048,953 |
7,283,645 |
27.25% |
| Soil and land protection |
200 |
10,427 |
59,147 |
35,919 |
7,848 |
103,541 |
0.39% |
| Nature protection and conservation of
biological diversity |
15,622 |
127,843 |
366,035 |
230,771 |
105,141 |
845,412 |
3.16% |
| Environmental education |
12,228 |
154,487 |
791,865 |
429,921 |
452,313 |
140,814 |
6.89% |
| Environmental monitoring and information
systems |
5,996 |
216,139 |
362,386 |
203,585 |
197,890 |
985,986 |
3.69% |
| Environmental and natural resource
exploration and assessment |
|
50,605 |
189,920 |
150,023 |
39,287 |
429,835 |
1.61% |
| Remediation of consequences of accidents and
other emergency actions |
12,447 |
170,287 |
291,662 |
224,703 |
151,285 |
850,385 |
3.18% |
| Environmental clean-up and rehabilitation |
|
3,984 |
100,064 |
72,928 |
43,790 |
220,767 |
0.83% |
| Radiation and nuclear safety |
|
|
283,542 |
112,379 |
85,000 |
480,921 |
1.80% |
| Material/technical support for environmental
protection institutions |
32,517 |
668,126 |
1,465,168 |
817,167 |
1,008,770 |
3,991,747 |
14.93% |
| European integration and other structural
projects |
|
|
503,516 |
322,862 |
208,260 |
1,034,638 |
3.87% |
| Total |
114,564 |
3,592,514 |
8,943,195 |
6,991,510 |
7,085,988 |
26,727,771 |
100% |
Source: Latvian Environmental Protection Fund
In accordance with the priorities of Latvian environmental policy,
the priority issues of the LEPF have been improvement of water
management and waste management.
Subsidies for collection and utilization of residues of
environmentally harmful goods and products (packaging material -
glass, metal, plastic, as well as automobile tires, accumulators,
other current sources, used automobile oil, and mercury-containing
luminescent lamps) are acquired by enterprises by application,
according to the Law On Natural Resources Tax and the associated
Cabinet of Ministers Regulations on the procedures and levels of
subsidies.
Financial support from the Latvian Environmental Protection Fund
has promoted the processing of glass chips, accumulators, tires,
metal and plastic packaging materials, used mercury lamps,
thermometers, and automobile oil.
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