BAKU, Azerbaijan, October 10. On Thursday, October 9, the Ministry of Defense signed agreements with the European Investment Bank (EIB), the Ministry of Finance, and the state-owned company Valsts nekustamie īpašumi (State Real Estate, VNĪ), reinforcing cooperation in implementing public-private partnership (PPP) projects in Latvia, Trend reports.
Under the PPP framework, the Ministry of Defense plans to develop residential and administrative areas and road infrastructure within the “Sēlija” military training base, as well as warehouse infrastructure in Kuldīga Municipality.
“In response to current geopolitical challenges, we are steadily implementing the National Armed Forces Development Plan 2025–2036, approved in 2023. Public-private partnerships are among the most effective and forward-looking models for developing military infrastructure. This cooperation will strengthen both Latvia’s and the region’s defense capabilities,” emphasized Minister of Defense Andris Sprūds.
“The Sēlija training area is a strategically important project not only for Latvia but for the entire Baltic region. This collaboration is not only about developing infrastructure but also about demonstrating readiness, resilience, and regional solidarity. The EIB is pleased to participate in this project as an advisor to ensure it is financially sound, sustainable, and impactful,” said Karl Nehammer, Vice President of the European Investment Bank.
“Our cooperation with the European Investment Bank demonstrates how public resources can be used wisely—by attracting private-sector expertise and international experience, which strengthens Latvia’s defense and economy. Since the EIB opened its office in Riga, its presence in Latvia has become increasingly significant—this year alone, EIB investments have exceeded 330 million euros, a substantial contribution to our economic development,” Minister of Finance Arvils Ašeradens added.
The EIB’s advisory support, provided at the initiative of Latvia’s Ministry of Defense, will focus on the development of military base, training area, and storage infrastructure. This will be the first PPP project in Latvia’s defense sector. The EIB has previously supported successful initiatives such as the construction of the Ķekava Bypass and the Ministry of Finance’s affordable rental housing program, which aims to build at least 924 apartments in seven Latvian cities by 2030.
Through its European PPP Expertise Centre (EPEC), the EIB will provide advisory services to prepare financial, risk, and impact assessments to ensure the PPP project is implemented effectively and efficiently. The advisory support will be financed by EIB resources. Its goal is to ensure that the military infrastructure is developed sustainably, is financially viable, and is attractive to private investors.
“We are honored to contribute to this strategically important project for Latvia’s and the region’s security. VNĪ will oversee the implementation of the project from the realization phase until the end of the availability period. Our team’s extensive experience in defense infrastructure management and PPP implementation will help ensure this ambitious initiative meets the highest quality standards,” said Renārs Griškevičs, Chairman of the Board of Valsts nekustamie īpašumi.
The EIB’s involvement in Latvia’s defense infrastructure projects reflects its growing role in strengthening Europe’s security and resilience. Across Europe, the EIB increasingly supports defense-related initiatives, including barracks construction, logistics centers, critical infrastructure, industrial capacity, advanced technologies, and small and medium-sized enterprises—all aligned with European Union initiatives to bolster security and resilience.
In late September, the Latvian Cabinet of Ministers approved the application of the PPP framework for defense infrastructure development. The decision instructs the Ministry of Defense to begin financial and economic assessments for the development of the Sēlija military base’s residential, administrative, and transport areas, as well as warehouse infrastructure in Kuldīga.
Under the PPP model, no state budget payments will be required during the project preparation and construction phases. Construction and operational risks will be transferred to the private partner, who will handle design, construction, and financing and maintain the facilities for 30 years after completion. The first availability payment to the private partner is expected at the beginning of 2030.
To recall, Public-Private Partnership (PPP) implementation in Latvia began with the adoption of the Concession Law in January 2000, followed by the validation of the concession promotion concept in April 2002. Following this, five PPP pilot projects were initiated in 2005 to establish good practices and identify obstacles, paving the way for larger projects like the Kekava Bypass, the country's first large-scale PPP, which was completed and opened in 2023.
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