The main challenges currently facing the improvement of energy efficiency in multi-apartment buildings are the rising cost of construction work and insufficient funding for building renovation, the Ministry of Economics (ME) said when commenting on the interim audit report published on Tuesday by the State Audit Office (SAO).
The ministry notes that in the past, low resident participation hindered energy-efficiency improvements, but today the more pressing issue is access to funding and the cost of renovations.
In its performance audit “Do investments in heat supply and building energy efficiency ensure sustainable and economically justified heat supply?”, the SAO’s interim report “Untapped Opportunities in Housing Renovation” highlights that Latvia primarily relies on European Union (EU) funds to improve the energy efficiency of apartment buildings — but the available funds are insufficient to meet the targets set in the National Energy and Climate Plan for 2021–2030.
Latvia has approximately 39,000 multi-apartment residential buildings, half of which were built during the Soviet era. The Ministry of Economics estimates that it would be economically justified to renovate most of these buildings — roughly 26,000. According to SAO calculations, more than €20 billion would be required to renovate all residential buildings in Latvia by 2050.
Raivis Bremšmits, State Secretary of the Ministry of Economics, notes that
promoting building energy efficiency is not a short-term process, as it requires large investments
that cannot be placed solely on residents’ shoulders. He stresses that energy-efficient renovation must become a permanent national-level priority, as timely investments in building maintenance and efficiency will reduce future costs and save billions over time.
The SAO’s interim report also finds that professional project management from the earliest stages is critical for successful renovation projects.
The ministry states that the audit provides recommendations for curbing cost increases, improving the use of existing funding, and increasing support for renovation measures. The Ministry of Economics has carried out a range of awareness activities and improved support mechanisms, which have resulted in strong interest in the latest multi-apartment energy-efficiency programme.
These efforts have strengthened understanding among all involved parties — municipalities, property managers and homeowners’ associations — of the importance of energy efficiency.
The ministry also notes that when
designing the 2021–2027 EU fund support programme, it took into account experience from previous programmes,
as well as expert recommendations. As a result, the €173 million available in 2025 through the Altum housing renovation programme was reserved in less than a month and a half.
The Ministry of Economics, together with the Ministry of Climate and Energy, is currently working to continue promoting energy-efficiency investments using the Social Climate Fund. The fund aims to provide financial support to vulnerable households that may face difficulties due to the EU’s green transition policies.
As previously reported by LETA, the SAO’s interim review concluded that at least 26,600 buildings in Latvia need renovation, but only around 4% have been renovated so far. Moreover, responsible ministries have not used all opportunities to expand access to renovation funding.
The State Audit Office estimates that apartment residents spend €360–390 million annually on heating. At current prices, heating expenses will exceed €10 billion over the next 20 years. Timely renovation could significantly reduce these costs while improving living quality and property value. At the same time, the audit reveals that due to rapidly rising renovation costs and insufficient funding, even motivated residents often have to postpone renovation decisions because of unpredictable costs and lack of adequate support.
SAO council member Mārtiņš Āboliņš points out that more than half of Latvia’s multi-apartment buildings were constructed 40–50 years ago and have not received sufficient investment in maintenance.
“As a result, the condition of buildings is gradually deteriorating,
while high energy consumption leads to disproportionately large heating bills,” he says.
Āboliņš emphasizes that renovation is not just about a prettier façade — it is essential to ensure that homes are high-quality, energy-efficient and affordable to maintain. “The longer renovation decisions are delayed, the more expensive the process becomes. Yet today only about 4% of homes in Latvia have been renovated, clearly showing that solutions are needed to make renovation easier and more accessible,” he adds.
At the same time, the SAO notes that residents’ interest in insulation and renovation has increased. For example, this year the funding available under the Altum renovation programme was fully reserved in less than a month and a half — demonstrating that people are ready to act when support is available.
However, the audit also finds that the Ministry of Economics and the Ministry of Climate and Energy have not used all opportunities to improve access to renovation funding.
The SAO reports that apartment owners’ awareness remains insufficient and often becomes a major barrier to starting renovations. According to the SAO survey, 39.5% of apartment owners are informed about energy-efficiency improvements or full building renovation, while 29.8% are partially informed.
Only 8% know the approximate costs of renovation.
The audit further concludes that a large proportion of residents are not being specifically informed about renovation opportunities — 57.8% of respondents indicated they have never been approached with information about building renovation options.
According to the SAO, the main obstacles preventing residents from making renovation decisions include concerns about costs (30.2%), construction quality (22.7%) and the complexity of procedures (15.6%).
Meanwhile, professional project-management support is currently available only after a loan is granted, even though the most complex tasks — preparing documentation, gathering technical information and convincing residents — must be done beforehand. The SAO found that during this initial phase, apartment owners are often left without support, which is one of the main reasons why projects are delayed or become more expensive.
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