June 11, 2025

Latvia

Country context (P3 lens)

Latvia is a high-income EU country with a developed and structured P3 market. P3s are used to mobilize private capital, accelerate infrastructure delivery, and transfer operational risk, particularly in transport, energy, and social infrastructure. The government has established national P3 legislation and institutional frameworks aligned with EU procurement rules and standards.

Verified sources: World Bank PPP Knowledge Lab, European PPP Expertise Centre (EPEC), Latvian Ministry of Finance, OECD.

Economic and infrastructure conditions

  • Economy: Small and open, with services, manufacturing, and transport sectors; infrastructure investment supports regional connectivity, urban development, and energy efficiency.

  • Infrastructure priorities:

    • Roads, highways, and bridges

    • Railways, ports, and logistics hubs

    • Electricity generation, distribution, and renewable energy projects

    • Water supply, wastewater, and municipal services

    • Hospitals, schools, and other social infrastructure

  • Private sector: Domestic and international investors participate, with EU funding often supporting project preparation and risk mitigation.

Public Private Partnerships framework

Legal and institutional setup

  • Latvia’s P3s are governed by national legislation aligned with EU procurement directives, with oversight from the Ministry of Finance.

  • Project approval requires feasibility studies, value-for-money assessments, lifecycle cost analysis, and fiscal risk evaluation.

  • Typical P3 structures:

    • Concessions for transport infrastructure (roads, ports, rail)

    • Build-Operate-Transfer (BOT) for utilities and energy

    • Availability-payment contracts for hospitals, schools, and municipal services

Market characteristics

  • Latvia has a structured P3 market, especially in transport and energy.

  • Financing structures include availability payments, revenue-sharing agreements, and EU-supported co-financing.

  • Investor base includes domestic, regional (Baltic), and EU international participants, particularly for large-scale infrastructure projects.

Sector experience and opportunities

Transport

  • Roads, highways, bridges, rail, and ports structured as concessions or BOT projects.

  • Urban transport modernization and logistics hubs offer P3 opportunities.

Energy and utilities

  • Renewable energy projects (wind, solar) delivered under BOT or concession models.

  • Electricity transmission and distribution increasingly involve private sector participation.

Water and municipal services

  • Urban water supply, wastewater, and sanitation projects delivered through service contracts or concessions.

Social infrastructure

  • Hospitals, schools, and public buildings delivered through availability-payment P3s, with EU funding often supporting project preparation and risk management.

Key P3 considerations

  • Project preparation: Strong emphasis on feasibility, lifecycle cost, and EU-aligned standards.

  • Risk allocation: Construction and operational risks transferred to private sector; regulatory and fiscal risks remain public.

  • Institutional capacity: Well-developed with technical guidance and oversight by Ministry of Finance and P3 units.

  • Market depth: Moderate domestic investor base; EU and international participation common for complex projects.

Outlook

Latvia is a structured and active P3 market with opportunities in transport, energy, and social infrastructure:

  • Focus sectors: roads, ports, energy, water, and social infrastructure

  • Projects are generally medium- to large-scale, bankable, and government-backed

  • EU alignment ensures technical guidance, regulatory certainty, and risk management

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