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NextGenerationEU: Latvia submits request to modify recovery and resilience plan and add a REPowerEU chapter

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On 26 September, Latvia submitted a request to the Commission to modify its recovery and resilience plan, to which it also wishes to add a REPowerEU chapter.

The REPowerEU chapter contains a reform to facilitate the development of renewable energy communities and energy self-generation. The reform also aims at increasing the uptake of sustainable biomethane. The chapter further contains three investment measures. Two of the three investments seek to improve the electricity grid by increasing its capacity (so that more renewable energy sources can be connected), by digitalizing and securing it, and by synchronising it with the EU grid. The third investment aims at increasing the share of sustainable biomethane in final energy consumption by creating a regional centre, where sustainable biomethane can be injected into existing infrastructures, building a regional biomethane ‘injection point'.

Latvia is also proposing to modify 44 measures included in its plan. These amendments are based on the need to factor in the very high inflation experienced in 2022 (one of the highest in the euro area) and the supply chain disruptions caused by Russia's war of aggression against Ukraine, which have made investments more expensive and caused delays.

The amendments are also based on the need to factor in the revision of Latvia's maximum Recovery and Resilience Facility (RRF) grant allocation, from €1.9 billion to €1.8bn. The revision is part of the June 2022 update to the RRF grants allocation key and reflects Latvia's comparatively better economic outcome in 2020 and 2021 than initially foreseen. However, as the value of the original Latvian plan is below the maximum RRF grant allocation, Latvia can still receive an additional €8.5 million after the June 2022 update is taken into account.

Latvia has requested to transfer part of its share of the Brexit Adjustment Reserve (BAR), amounting to €10.9m, to its recovery and resilience plan. Together with Latvia's REPowerEU grant allocation (€124m), these additional funds make the submitted modified plan worth almost €2bn.

The Commission has now up to two months to assess whether the modified plan fulfils all the assessment criteria in the RRF Regulation. If the Commission's assessment is positive, it will make a proposal for an amended Council Implementing Decision to reflect the changes to the Latvian plan. Member states in the Council will then have up to four weeks to endorse the Commission's assessment.

More information on the process concerning REPowerEU chapters and the revision of recovery and resilience plans can be found in this Q&A.

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