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About KPFI

The climate change financial instrument (KPFI) is a Government budget program of Republic of Latvia.

Aim of KPFI is to prevent global climate change, adaptation to the effects of climate change and contribute the reduction of greenhouse gas emissions (for example, implementing activities to improve the energy performance of buildings in both public and private sectors, the development and implementation of technologies that use renewable energy resources, as well as the implementation of the integrated solutions to reduce greenhouse gas emissions).

The financing of the Tender is formed by the Proceeds from the Assigned Amount Units Purchase Agreements which are made within the international emissions trading under the Kyoto Protocol. The AAU sales are possible, because in the Kyoto Protocol for period of 2008-2012 for the enforcement of obligations (8% total reduction compared to 1990 levels) Latvia will not need all available AAU, and the potential excess will be at least 40 million units. Use of all remaining AAU for other purposes, such as granting to the trading companies of European Union Emission quotas is not possible - AAU it is not possible to convert into emissions quotas or use instead of emission quotas. However, the AAU is possible to sell, all income to invest in the development of Latvia. Decision on the sale of the AAU made by Cabinet of Ministers Regulation No 249 adopted on April 12, 2006 " On Conception on Participation of Latvia in International emission trade ".

KPFI activities are regulated by the concluded International agreements for the sale of the AAU of Latvia, as well as approved legislation, such as the law "On Participation of the Republic of Latvia in the Flexible Mechanisms of the Kyoto Protocol" (entered into force on 13 December 2007), Cabinet of Ministers regulation No 312 "By-law of the Advisory Council of Climate Change Financial Instrument" (approved on 28.04.2009) , Cabinet of Ministers Regulation No.644 "Procedures for Implementation of Projects Financed by the Climate Change Financial Instrument, the Submission and Examination of Reports Thereof" (approved on 25.06.2009).

Information about the tenders funded by KPFI, as well as the application, review, approval and funding procedures are found in The Ministry's of the Environmental Protection and Regional Development website http://www.vidm.gov.lv.

Mandatory regulations

Horizontal regulations:

  • The Law "On Participation of the Republic of Latvia in the Flexible Mechanisms of the Kyoto Protocol" (adopted on 08.11.2007, in force since 13.12.2007) (amended by the Saeima on 28 January 2010, and 16 December 2010, the latest amendments in force since 1 January 2011). This Law prescribes the basic principles for participation of the Republic of Latvia in the flexible mechanisms of the Kyoto Protocol and the competence of institutions related to this participation as well as the procedures of planning, utilisation and administration of the resources obtained as a result of sale of the assigned amount units owned by the State.

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