The European Commission has approved two Latvian schemes with a total budget of €181.5 million to support small and medium-sized enterprises and large companies across sectors in the context of Russia's invasion of Ukraine.
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Latvia notified to the Commission under the Temporary Crisis Framework two schemes with a total budget of €181.5 million to support SMEs and large companies across sectors in the context of Russia's invasion of Ukraine.
Under these measures, which will be administered by the State-owned Joint Stock Company and Latvian public development bank Altum, the aid will take the form of guarantees on new loans and leases; and subsidised loans.
In light of the high degree of economic uncertainty caused by the current geopolitical situation, the schemes are aimed at ensuring that sufficient liquidity remains available to the companies in need.
The measures will be open to companies across sectors with the exception of credit and financial institutions.
As regards the guarantees, they will cover up to 90% of the loan or lease principal. Losses will be sustained proportionally by the credit institutions and the State. The estimated budget for this measure is €22.5 million.
When it comes to subsidised loans, they will be granted directly by Altum. The budget for this measure is €159 million.
Both the maximum loan or lease amount covered by a public guarantee and the maximum subsidised loan per beneficiary will be equal to either 15% of its average total annual turnover over the last three closed accounting periods; or 50% of the energy costs incurred over a 12-month period preceding the application for aid.
Exceptionally, when the beneficiaries are start-ups or companies with low or no turnover in 2019 and 2020 heavily affected by the current crisis, the amount of the loan or lease may be increased to cover their liquidity needs for a 12-month period for SMEs; and for a 6-month period for large enterprises.
The Commission found that the Latvian schemes are in line with the conditions set out in the Temporary Crisis Framework.
In particular, the maturity of the guarantees and loans will not exceed six years; the guarantee premiums and the reduced interest rates respect the minimum levels set out in the Temporary Crisis Framework; and the support will be granted no later than 31 December 2022. ■