Investor Day demonstrates the market's readiness to engage in the largest housing PPP programme in the Baltics

More than 80 representatives of investors, financial institutions, developers, construction companies, legal and financial advisers participated in the Investor Day for the Public Private Partnership (PPP) programme “Rental Housing for Latvian Professionals”, organised by SJSC “State Real Estate” (SRE) on 9 June. The broad interest from local and international market participants demonstrates confidence in the project's readiness and Latvia's ability to implement complex infrastructure projects corresponding to international practice.

The Investor Day became an important milestone in the development of the programme, bringing potential investors, financiers and project partners together for the first time to present in detail the financial, legal and technical framework of the project. Participants were given the opportunity to assess the project parameters in detail, ask questions to the project team and local governments, as well as discuss possible involvement in the implementation of the project.

Renārs Griškevičs, Chairperson of the Board of SRE, stresses: “We are really pleased with the great responsiveness on Investor Day - it is a clear sign that interest in this PPP programme is not only there, but also keeps growing, and the market is taking it as serious attitude. This gives us confidence in the direction of the project and rightness of its structure. At the same time, it is also a very important signal for the next steps to take - this day is followed by a focused effort on assessment of the questions asked by investors and preparation for the selection of a private partner, from qualification to the best and final proposal. It is a process that is based on clear sequence and transparent cooperation with all partners.”

The programme has been developed in response to one of the most pressing challenges of regional development - lack of quality and affordable rental housing. In many parts of Latvia, housing availability has become a major barrier to attracting professionals in the health, education, security and other sectors.

“Public private partnership is a globally proven tool for the implementation of large and socially important projects. In Latvia, we still use this opportunity too rarely. One of the main reasons is excessive bureaucracy - while projects are in the process of construction in other countries, we often handle the paperwork for years. If we want more results and fewer delays, cutting red tape must finally become a real priority”, said Māris Kučinskis Minister for Finance, in his opening speech.

The private partner will have to ensure housing availability according to the DBFMO (Design, Build, Finance, Maintain, Operate) approach, while the State support will ensure that rent will be affordable for professionals and corresponding to the availability indicator of the average income level in the municipality or state city. Houses and land remain the property of the municipalities during the implementation and after completion of the project.

In parallel, SRE in cooperation with the advisers engaged by the Council of Europe Development Bank (CEB) continues work on the preparation of Lot 2 of the programme. Lot 2 of the programme assesses construction of rental housing on highly developed land plots in 14 towns and cities: Sigulda, Rēzekne, Kuldīga, Olaine, Ķekava, Smiltene, Aizkraukle, Alūksne, Jelgava, Liepāja, Ventspils, Riga, Gulbene and Līvāni.

The programme is implemented in close cooperation with experts from the European Investment Bank (EIB) and the Council of Europe Development Bank, attracting international experience and investments for the development of the housing sector in Latvia. Further information on the Investor Day and the PPP programme is available on the SRE website: https://www.vni.lv/projekti/ires-majokli-latvijas-specialistiem.

At the beginning of this year, SRE and six local governments have signed agreements on joint participation in Lot 1 of the PPP programme “Rental Housing for Latvian Professionals”. The agreements concluded provide for the construction of 1290 apartments under Lot 1 of the programme: In Tukums: 150 apartments (at Smilšu Street), in Jēkabpils: 140 apartments (at Celtnieku Street), in Cēsis: 100 apartments (at Festivāla Street), in Gulbene: 48 apartments (at Malienas Street), in Daugavpils: 120 apartments (103 Nometņu Street), in Riga: 732 apartments (at Tīnūžu, Mežrozīšu and Ozolciema Streets).

Investor Day materials

Investor Day video recording: https://www.youtube.com/watch?v=daOymUWT11U