Budget, Financial Services, Latvia, Markets and Companies

The report explains that state budget funding includes different types of revenue - compensatory mechanisms such as an earmarked subsidy paid by the power utility Latvenergo to fix the mandatory procurement component, payments for government-purchased services, such as healthcare services and maintenance of hospitals' facilities and resources, subsidies for concerts and performances staged by theaters and orchestras, etc.

Compared to 2017, state budget financing for state-owned companies decreased by EUR 349.5 mln or 33.5% in 2018, mainly due to a one-off compensation of EUR 454.4 mln granted to Latvenergo in 2017 for refusing to receive in the future 75% of annual electricity payments for Riga first and second combined heat and power plants.

Excluding the one-off compensation to Latvenergo, the total state budget financing to other state-owned companies increased by EUR 104.9 mln or 17.8 % in 2018.

According to the Cross-sectoral Coordination Center, the largest recipients of state budget funding in 2018 were healthcare companies. Last year, they received EUR 326.2 mln in public funding, or 47% of the total funding received by state-owned enterprises.

Transport companies received EUR 134.9 mln or 19.4% of the total state budget financing in 2018, and energy companies received EUR 92.7 mln or 13.4%.

Of individual companies, the largest amount or EUR 111.5 mln went to the Riga Eastern Clinical University Hospital last year, followed by Pauls Stradins Clinical University Hospital - EUR 98.9 mln, and Latvenergo Group - EUR 92.7 mln.