Energy-intensive manufacturing companies will have state support to compensate for the increase in energy costs

At the assembly of the Cabinet of Ministers on September 20, the support program developed by the Ministry of Economy for energy-intensive processing trade retailers to mitigate the penalties of Russia’s army aggression in opposition to Ukraine on the economic system was authorised, the Ministry of Economy informs.

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Minister of Economy Ilze Indriksone feedback: “The manufacturing sector is most carefully associated to different sectors of the nationwide economic system and is an important issue for the development of those sectors. However, one among the most necessary components that slows down the quicker improvement of native trade is the comparatively excessive energy provide costs for our industrial companies, that are increased than in different nations in the Baltic States and the Nordic area as an entire. For industrial companies in the manufacturing course of, the value of electrical energy constitutes a way more vital expense merchandise than in different industries.”

The objective of the support program is to scale back the impression of the army aggression on the Latvian economic system on financial operators who want liquidity support in reference to the extra costs incurred by retailers in reference to a particularly sharp increase in the costs of energy assets.

Support for energy-intensive companies in the manufacturing trade will be obtainable in the type of a grant (present). The grant support for compensating the value increase of pure fuel and electrical energy assets for one service provider will be up to 30% of the attributable costs of pure fuel or electrical energy, not exceeding 2 million euros in complete for one service provider. The support can be deliberate to be utilized as an advance fee (ie for November and December of this yr), after checking the precise bills and, if vital, recalculating the quantity of support supplied.

Support will be obtainable to retailers who meet the following situations:

  • the service provider performs primary financial exercise in one among the sectors talked about in the Annex to the Cabinet of Ministers’ Regulations;
  • its energy useful resource costs make up a minimum of 3% of the product owner’s complete financial exercise costs;
  • the complete electrical energy consumption for the product owner’s wants in 2021 was a minimum of 500 MWh or the complete fuel consumption in 2021 was a minimum of 500 MWh.

State price range funding in the quantity of EUR 50 million is deliberate for the provision of support to energy-intensive processing trade retailers, which will permit offering support to roughly 400 retailers. Support for energy-intensive retailers will be supplied by the State Control Office for Construction, which has already been supervising energy-intensive retailers. Merchants will have the option to apply for support after coordinating the support program with the European Commission.

Support for energy-intensive retailers will be obtainable for the interval from February 1, 2022 to December 31, 2022. The service provider will have the option to apply for support for the complete interval in complete or for particular months when an increase in costs has been detected.

The detailed situations of the support program are contained in the draft laws of the Cabinet of Ministers “Implementation laws of support for energy-intensive processing trade retailers to mitigate the financial penalties of Russia’s army aggression in opposition to Ukraine”, revealed on the Legal Acts portal.

Approving the amendments to the “Law on Support for Overcoming the Economic Consequences of Sanctions and Countermeasures Applied Due to Russia’s Military Aggression Against Ukraine”, the Cabinet of Ministers this yr. on August 23 and the Saeima this yr. On August 30, a choice was made that energy-intensive processing trade retailers will be compensated for the increase in energy useful resource costs skilled this yr in the type of a grant (present) for the interval from February 1, 2022 to December 31, 2022.

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