Riga, Oct 2 (LETA) - On Wednesday, 13 municipalities signed a letter of intent on the private-public partnership (PPP) program Rental Housing for Latvian Professionals promoted by the Finance Ministry and Valsts Nekustamie Ipasumi (VNI) state real estate manager, committing to build at least 2,116 low-rent dwellings.

Among them, Riga plans to build 1,000 apartments in cooperation with private partners, Liepaja - 250, Valmiera - 150, Jekabpils - 130 to 150, Jelgava - 130, Daugavpils - 120, Sigulda - 110, Cesis - 100, Rezekne - 60, Kuldiga and Olaine - 50 each, and Aluksne and Kekava - 48 apartments each.

It is planned that these municipalities will study the situation in the next year, and after a year the municipal councils could take decisions on the construction of housing. The housing is planned to be built by 2029-2030.

VNI informed that the program will provide modern, energy-efficient and affordable apartments for young professionals and their families in sectors of importance to the Latvian state and local governments - teachers, firefighters, police officers, military officers, state and local government employees and others.

The first phase of the program will include economic calculations for the implementation of the program in the municipalities that signed letters of intent on Wednesday. The program foresees the construction of at least 1,000 but no more than 2,266 rental dwellings. VNI informed that the exact number of apartments will be determined after the financial calculations are made in 2025. Local governments will have to ensure the allocation of land plots and co-financing of rental apartments when they become available, taking into account the population's ability to pay and the market situation.

At the signing event, Finance Minister Arvils Aseradens (New Unity) stressed that the budget situation over the next four years will not be easy, which is why the development of PPP projects is crucial. The minister noted that, for example, 50 successful PPP projects have already been implemented in Lithuania, but only two in Latvia, including the Kekava bypass.

Aseradens said that 40 percent of the population in Latvia cannot afford to buy or rent a new home. That is why on Wednesday a letter of intent was signed with 13 municipalities that have reserved land for the construction of housing to implement the PPP programme.

The finance minister said that after a study, the municipalities will come up with a realistic offer for the housing program, the municipalities' co-payments will be clarified and then the necessary funding will be made clear, which will be provided by the European Investment Bank (EIB). A private partner will be selected in a tender to build and manage the housing for the next 25 years. The housing will then be handed over to the municipalities.

Aseradens also stressed that the EIB Group, as a strategic partner, plays a crucial role in both public and private investment in Latvia. This is the first time that such a large-scale advisory agreement with the EIB has been signed in Latvia and ensures that international institutional investors can also finance the construction of affordable rental housing.

EIB Vice-President Thomas Ostros said that there is a clear underinvestment in affordable and social housing across Europe, as well as a huge need for renewal of existing housing stock. The EIB is strongly committed to addressing this underinvestment and it is one of the EIB's eight strategic priorities.

According to the Cabinet decision of June 11, the implementation of the program in Latvia has been entrusted to VNI. In July, VNI signed a contract with the EIB to carry out the necessary financial and economic calculations and to provide consultancy services.