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LVM Supervisory Board Supports the Establishment of a Joint Venture for the Construction of Wind Farms

The Supervisory Board of JSC “Latvia's State Forests” (LVM) has reviewed the documents prepared by the Board of the company and made a decision to support the establishment of a joint venture with JSC “Latvenergo” for the creation of wind farms in the lands owned by LVM.

In the near future, LVM Supervisory Board will ask the company's shareholders’ meeting to agree on the establishment of a joint venture between JSC “Latvia's State Forests” and JSC “Latvenergo” and the conclusion of a participants' agreement with JSC “Latvenergo” on the cooperation in the management of the joint venture. It will also be necessary to approve the draft Cabinet Order “On the General Strategic Objective of Joint Stock Company “Latvia’s State Forests”” for it to be further reviewed by the Ministry of Agriculture and the Cabinet.

Chairman of the Supervisory Board of LVM Edmunds Beļskis: “In the coming years, JSC “Latvia’s State Forests” will play an important role in strengthening the country's energy independence and providing low-carbon or carbon-free energy. The joint venture for the establishment of wind farms will provide an opportunity to increase the amount of electricity generated locally in Latvia, which means increasing Latvia's energy independence in the future and achieving the country's climate neutrality goals. By combining the available resources, knowledge, and competence of two strategically important Latvian companies – JSC “Latvia’s State Forests” and JSC “Latvenergo”, I am convinced that we will create positive synergies for the development of the new joint venture.”

To set up the joint venture and ensure its successful operation, the regulatory framework needs to be improved in the near future to ensure a level playing field for all market participants, land lease terms in line with the investment cycle and other aspects. This requires amendments to the Energy Law regarding the term of building rights for the development of wind farms, amendments to Cabinet Regulation No. 350 “Regulations on Land Lease and Building Rights of Public Persons”, as well as development of a regulation that would allow for the implementation of strategically important projects.

Pursuant to the decision of the Cabinet of Ministers of 22 February 2022, the shareholders of JSC “Latvenergo” and JSC “Latvia's State Forests” must by 1 May 2022 prepare and submit to the Cabinet a draft legal act on granting permission to JSC “Latvenergo” and JSC “Latvia's State Forests” for the establishment of a joint venture, which will implement a wind farm project in State forest lands to achieve the goals of National Energy and Climate Plan 2030 and further progress towards achieving climate neutrality, through promoting energy independence and inclusion of local businesses in supply chains.