On 27 June 2023, the Cabinet of Ministers approved a draft regulation prepared by the Ministry of Environmental Protection and Regional Development (VARAM), which provides funding for municipalities to develop innovative solutions to improve the efficiency of local government services, in line with the Regional Policy Guidelines 2021–2027. The total planned European Regional Development Fund (ERDF) funding is 15.52 million euros.
The draft regulation entitled "Implementation rules for measure 5.1.1.4 'Smart Municipalities' of specific support objective 5.1.1 'Promoting integrated social, economic and environmental development and cultural heritage, tourism and security in urban functional areas' of the European Union Cohesion Policy Programme 2021–2027" was developed with the aim of fostering the development of smart municipalities by introducing smart solutions in the performance of municipal autonomous functions and related administrative tasks.
Minister Māris Sprindžuks stated: "Current regional and global development challenges—such as population decline, the low proportion of innovative companies in the regions, the 'ageing' range of existing municipal services, the high cost of municipal services, and the challenges posed by climate change—compel us to seek new ways for municipalities to become more efficient, modern, and capable of responding to the diverse needs of their residents. Implementing these projects would enable municipalities to increase the efficiency of the services they provide by introducing smart solutions to reduce the cost per service user, energy consumption, or time spent on providing and receiving services, by implementing projects in any of these areas."
Municipalities will be able to submit project ideas for smart solution development to improve the efficiency of services provided under any of the autonomous functions of municipalities mentioned in Article 4 of the Law on Local Governments.
To encourage smart solutions with regional impact, the draft regulation specifies the ERDF funding available to municipalities in each planning region, ensuring that innovative solutions in the areas of autonomous municipal functions are implemented in every planning region. The total planned ERDF funding for measure 5.1.1.4 is 15,529,500 euros, of which 3,105,900 euros is allocated to the territory of each planning region.
It is intended that supported municipal projects will be determined through a pre-selection of project ideas jointly organised by the planning regions and VARAM, where all municipalities, their institutions, and capital companies across all planning regions will be able to submit their ideas. Before the pre-selection, VARAM will provide project applicants with information on the compliance and quality criteria against which a VARAM opinion will be issued. If a project idea meets all the evaluation criteria of the pre-selection and receives a relatively higher score after the evaluation of quality criteria, VARAM will prepare a positive opinion and submit it to the relevant planning region, municipality, and cooperation partner (if applicable), as well as to the Central Finance and Contracting Agency (CFLA). Upon receipt of the first positive VARAM opinion regarding a project idea included in the planning region's development programme, the CFLA will announce a restricted call for project proposals and invite one or more project applicants specified in the relevant planning region's development programme to submit a project application for the restricted call.
The draft regulation also provides for a requirement to obtain a scientific expertise opinion from the Latvian Council of Science confirming that the smart solution planned in the project is innovative on a national scale.
The measure is intended to be implemented by 31 December 2029.
The evaluation criteria for project applications were approved at the European Union Funds Monitoring Committee meeting on 11 April 2023.