1. MINISTRY OF ENVIRONMENTAL PROTECTION AND REGIONAL DEVELOPMENT OF THE REPUBLIC OF LATVIA 1 INTEGRATED TERRITORIAL INVESTMENT (ITI) PRIORITY FOR EU FUNDING 2014 – 2020

2. Strategic and policy planning documents 2  Complies with "Europe 2020: A strategy for smart, sustainable and inclusive growth" priority "inclusive growth” – fostering such economy where is high-employment and which ensure economic, social and territorial cohesion  Complies with the National Reform Programme „Europe 2020” main reform directions - Improving the business environment; reduction of administrative barriers  Complies with National Development Plan 2014-2020, objective to ensure preconditions for development of entrepreneurship and creation of new workplaces in regions (development of national and municipal infrastructure for attraction of private investments in development centers, business facilitating public infrastructure in coastal area and Eastern border area)  Complies with draft Regional Policy Strategy 2013-2019 objective to promote entrepreneurship and employment; investment support directions for Metropolitan Area of Riga, Baltic sea coastal areas and Eastern border area  The proposed activities are defined and described in detail in draft Regional Policy Strategy 2013-2019 elaborated by MoEPRD

3. Current situation 3  Regional disparities create unequal quality of life and development opportunities for population of different regions and municipalities.  4 th highest rate in dispersion of regional GDP per inhabitant in EU NUTS 3 regions (43.3%) (2009). The GDP of Riga planning region – capital city region - constitutes two thirds or 66.0% of the GDP of the country  Number of inhabitants in 2000-2011 has decreased - in some remote municipalities even by 25-30% Overall Latvia currently is characterized by mono-centric settlement structure and economic activity that is concentrated around the capital city and its surrounding areas. A significant cause of regional disparities is low entrepreneurial activity in regions and insufficient preconditions to increase it.  In 2011 Riga planning region received 56.4% of all non-financial investments. In 2011 67% of all occupied workplaces were located in Riga planning region Change of population in last 5 years GDP, 2009

4. Basic features of the approach  Based on an integrated territorial strategies – place-based approach (coordination of investments related to several sectors in time and space)  Based on bottom-up approach  Covers functional target areas (groups of municipalities with similar features and challenges)  Multi-fund approach – ERDF and ESF under a single priority [complementarity also with EAFRD]  Complimentary with activities for community-led local development 4

5. Strategic view of ITI – target territories (I) 5  Promotion of polycentric development (9 cities and 21 towns)  Long-term sustainable development strategy “Latvia 2030” defines the network of national and regional development centers  Centers have been chosen considering:  Concentration of population  Historical role of these cities and towns as centers of former regional municipalities  Preconditions for entrepreneurship, industrial development and service provision that will allow these centers to provide jobs and services to wider areas  Accesible network of centres – on avarage 50 km beatween centres  Unlocking potential of specific (functional) target areas (defined by “Latvia 2030”)  Eastern border area  Coast of the Baltic Sea  Metropolitan Area of Riga

6. Strategic view of ITI – bottom-up approach (II) 6  Territorial investments have to be based on development opportunities and priorities identified at local and regional level that are justified in territorial development planning documents (development programs of municipalities as investment requests for public investments to national government) in order to:  Ensure tailoring of support to specific needs of each area,  Ensure higher impact of investments on development of territories  Provide municipalities the opportunity to define their own strategies and implement them  Planned activities are related to various sectors (transport, economics, tourism, comunications etc.). To ensure complimentarity and coordination of territorial investments, all activities for “Latvia 2030” target areas have to be implemented as ITI under a single programme (priority)

7. Strategic view of ITI (III) 7 ITI Development of business support infrastructure Development of Eastern border area (infrastructure for accessibility, promoting economic activity, including transit & logistics services) Support to promote competitiveness of Riga city (objects of national significance) Strengthening the capacity of regions and municipalities regarding their work with entrepreneurs Development of costal area (business facilitating public infrastructure) ITI – support for implementation of local development programmes (funding to investment projects of municipalities that are defined acording to development opportunities and priorities identified in development programme of the municipality) ITI – support for implementation of local development programmes (funding to investment projects of municipalities that are defined acording to development opportunities and priorities identified in development programme of the municipality) Support to specific target areasUrban development (9+21)

8. Strategic view of ITI (IV) 8 Thematic objectives (Investment priorities) targeted:  (3) enhancing the competitiveness of small and medium-sized enterprises, through: (a) promoting entrepreneurship, in particular by facilitating the economic exploitation of new ideas and fostering the creation of new firms, including through business incubators, (c) supporting the creation and the extension of advanced capacities for product and service development;  (6) Protecting the environment and promoting resource efficiency, through: (c) protecting, promoting and developing cultural and natural heritage; (e) action to improve the urban environment, […] regeneration of brownfield sites and reduction of air pollution.  (9) Promoting social inclusion and combating poverty, through: b) support for physical […] economic and social regeneration of deprived urban and rural communities and areas.  (11) Enhancing institutional capacity and an efficient public administration by strengthening of institutional capacity and the efficiency of public administrations and public services [...]

9. Strategic view of ITI (V) 9 No.Activity Problem targetedObjectives Urban development 1 Development of business support infrastructure in national and regional development centers General: pronounced regional disparities, incl. economic activity lack of sufficient critical mass of recourses in most part of national and regional development centers Specific: lack of workplaces and employers in regions e.g. unemployment rate in Riga planning region 6,7%, in other regions – 9,2-15,2%; the proportion of self-employed individuals in Riga planning region comprises 27,1%, in other regions – 43-52% insufficient non-financial investments attracted in regions, e.g. Riga planning region received 56,4% of all non-financial investments, the shares of other regions comprised 8,0 – 15,9%, shortage of qualitative offers from municipalities to potential investors e.g. in 2011 348 foreign investors showed interest to make investments in Latvia, but only 17 (0,5%) made positive decisions gaps in the existing infrastructure of industrial areas in municipalities e.g. incomplete access roads and engineering communications To invest in development of business support infrastructure, in order to contribute to development of entrepreneurship and creation of new workplaces. 2 Strengthening the capacity of regions and municipalities regarding their work with entrepreneurs Insufficient investments attracted in regions insufficient capacity of municipalities regarding work with entrepreneurs (lack of specialists, lack of knowledge and skills etc.) Only 34% of municipalities have a specialist for this. insufficient activities in promotion of entrepreneurship by municipalities (unused potential) To strengthen the administrative capacity of regions and municipalities for attraction of investors to territories, thus contributing to development of entrepreneurship and creation of workplaces

10. Strategic view of ITI (III) 10 No.Activity Problem targetedObjectives Support to specific target areas 3 Support for development of business facilitating public infrastructure in the coastal area insufficiently used development potential of Baltic sea coastal area (relatively few companies are working in sectors typical for coastal area) e.g. only in 5 out of 13 coastal municipalities among 10 largest companies are enterprises whose activities are closely linked to the typical coastal area sectors challenges related to the need for conservation of nature and cultural heritage, and climate change To develop public infrastructure in coastal area, contributing to increase of economic activity, effective use of coastal resources, ensuring preservation of nature values and promotion of sustainable tourism at the same time. 4 Support for development and improvement of municipal infrastructure in the Eastern border area to promote economic activity particularly low population density, economic activity and considerable outmigration, high level of unemployment e.g. Eastern border area composes 20,6% of total area of the country, but only 7,4% of the population live there; economic activity per 1000 inhabitants - 54,5% of average rate in amalgamated municipalities. remoteness and underdevelopment of the area, limited market due to proximity of state border significant distance to the capital city and other centers of economic activity - located 204-267 km from the capital city significant unused potential for development of transit and logistics services due to its location To invest in public infrastructure of Eastern border area in order to contribute to development of entrepreneurship and reducing the effects of remoteness of the area 5 Support to promote competitiveness of Riga city Insufficient technical condition of cultural infrastructure in Riga city where nationwide cultural events could take place To invest in public infrastructure of national significance in Riga city thus promoting nationwide cultural services and contributing for international competitiveness of Riga city

11. MINISTRY OF ENVIRONMENTAL PROTECTION AND REGIONAL DEVELOPMENT OF THE REPUBLIC OF LATVIA 11 URBAN DEVELOPMENT ACTIVITIES FOR EU FUNDING 2014 – 2020

12. (1) Development of business support infrastructure in national and regional development centers Target group: entrepreneurs, municipalities, residents of 9 municipalities containing national development centers and 21 municipalities containing regional development centers defined by “Latvia 2030” and its functional area Type of support:  Creation, reconstruction or expansion of industrial sites and adjusting public infrastructure for attraction of investments, incl. development of public transport infrastructure and support for building the necessary connections to engineering communications (locations will be determined in draft Regional Policy Strategy) Output indicators:  Size of renovated/ newly developed public and commercial areas in the city or amalgamated municipality - 874 hectares  Number of renovated/ newly developed industrial areas in the local governments of national and regional development centers – 10 Result indicators:  Number of jobs created or maintained in enterprises whose production or services are provided in the supported industrial area of the development center or the capital investment project - 9000 ERDF funding - 250.28 million EUR National co-financing – 44.18 million EUR 12

13. (2) Strengthening the capacity of regions and municipalities regarding their work with entrepreneurs Target group : entrepreneurs, municipalities, residents of 9 municipalities containing national development centers and 21 municipalities containing regional development centers defined by “Latvia 2030” and its functional area, regions Type of support:  Complex support to strengthening capacity of specialists regarding their work with entrepreneurs Output indicators:  Number of projects targeting public administrations or public services (incl. training, participation of municipalities in exhibitions) – 35  Number of professionals trained – 35 Result indicators:  Number of investors attracted to municipalities of national and regional development centers – 30 ESF funding - 1.92 million EUR National co-financing – 0.21 million EUR 13

14. MINISTRY OF ENVIRONMENTAL PROTECTION AND REGIONAL DEVELOPMENT OF THE REPUBLIC OF LATVIA 14 ACTIVITIES FOR EU FUNDING 2014 – 2020 PROVIDING SUPPORT TO SPECIFIC TARGET AREAS

15. (3) Support for development of business facilitating public infrastructure in the coastal area Target group: residents, entrepreneurs, coastal municipalities, tourists in the coastal area Type of support:  Construction and reconstruction of business facilitating public infrastructure in coastal area for promotion of entrepreneurship, including roads, cycling routes, trails for transportation of oversize sports equipment, accessibility facilities for disabled persons, pathways; nature parks, information centres for visitors etc.)  Support to safety and rescue infrastructure (ramps for operational transport etc.) Output indicators:  Size of renovated / newly developed public and commercial areas in amalgamated municipality or city - 775 700 square meters  Increase in expected number of visits to supported sites of cultural and natural heritage and attractions - 351 000 Visits/year  Number of renovated / newly developed infrastructure objects – 130 Result indicators:  Increase in the number of enterprises (new minus liquidated) per year in coastal municipalities – +10 % ERDF funding - 37.28 million EUR National co-financing – 10.03 million EUR 15 Long-term thematic spatial plan for the development of the Baltic Sea coastal infrastructure

16. (4) Support for development and improvement of municipal infrastructure in the Eastern border area to promote economic activity Target group : entrepreneurs, municipalities, residents in the Eastern border area Type of support:  Support for development and improvement of municipal (public) infrastructure in the Eastern border area to promote economic activity and accessibility of work places Output indicators:  Total length of reconstructed or upgraded roads - 31,1 km  Developed or improved public infrastructure promoting economic activity - 189 896 square meters Result indicators:  Level of unemployment in the municipalities of Eastern border area - 15,9 %  Revenue from the Personal income tax per inhabitant in the municipalities of Eastern border area - 174,92 LVL ERDF funding - 58.05 million EUR National co-financing – 10.24 million EUR 16 Development Programme of Latgale (Eastern border area)

17. (5) Support to promote competitiveness of Riga city Target group : municipality of Riga, residents, entrepreneurs, cultural tuorists Type of support:  Support for development of cultural and sports infrastructure of national significance in municipality of Riga Output indicators:  Number of supported cultural infrastructure objects – 3 Result indicators:  Number of visits at supported cultural infrastructure objects - 200 visits annually (per 100 inhabitant) ERDF funding – 120,94 million EUR National co-financing – 21,34 million EUR 17

18. MINISTRY OF ENVIRONMENTAL PROTECTION AND REGIONAL DEVELOPMENT OF THE REPUBLIC OF LATVIA 18 Thank you for your attention!