Annual Examination Meeting OP «Entrepreneurship and Innovation» OP «Infrastructure and Services»

1. Annual Examination Meeting OP «Entrepreneurship and Innovation» OP «Infrastructure and Services» 5 December 2012

2. Implementation of EU Funds • Progress towards strategic objectives of NSRF • Progress ofstrategicobjectives • Financial progress • Latestfiguresofthefinancial progress • Forecasts • NeedformodificationsofOP’s • Recoveriesandwithdrawals • Progress of physical implementation • Contribution to EU 2020 • Coreindicators • Mainissuesin 2013 • Youth unemployment Commission initiative

3. Strategic objectives – context indicators * Taking into account data of population census in 2011

4. Strategic objectives – impact indicators * Taking into account data of population census in 2011

5. Progress towards strategic objectives of NSRF • Progress ofstrategicobjectives • Financial progress • Latestfiguresofthefinancial progress • Forecasts • NeedformodificationsofOP’s • Recoveriesandwithdrawals • Progress of physical implementation • Contribution to EU 2020 • Coreindicators • Mainissuesin 2013 • Youth unemployment Commission initiative

6. 2007-2013 EU Funds implementation by 31.10.2012 (M LVL, % of EU funding according to OPC, progress since 31.08.2011) * Considering that 3.3.2.1.activity Passengertrain Major Project will not be implemented (100,1 M LVL). The negotiations are being held on the allocation of the activity funding to other projects.

7. EC payments to EU new member statesby 06.11.2012(% of state’s allocation, progress since 05.09.2011 *) Within ERDF Latvia has received 46,7% of EU Funding (6th place) and within CF – 42,8% (5th place) * In 05.09.2011 Latvia was also in 4th place (with received 33,2%) between EU NMS

8. Targets of payments to FB’s in 2012 (M LVL, % of target and forecast) After 2012 results financial flow 2007-2015 update will be done Updated information of target for payments and necessary budget – by February 2013

9. EC payment forecasts (M LVL, % of submitted forecasts) Data by 02.11.2012.; it is planned to submit payment claims in the end of 2012

10. Financial flow for planning period 2007 – 2013 (M LVL)

11. N+2/N+3 decommitment «red line»(M LVL)

12. Need for OP modifications • MA has assigned MoE to assess the necessity of OP «Entrepreneurship and innovations» modifications to indicate market failures and most efficient instruments to address them • Modifications in OP «Infrastructure and services» are not planned

13. Financial progress of prioritiesOP «Entrepreneurship and Innovations»(% of EU Funding, M LVL) *46% (59,4 M LVL)are payments on the ground ** Contracted amount = OPC financing (129,5 M LVL), according to OP allocation is 118,2 M LVL

14. Financial progress ofprioritiesOP «InfrastructureandServices» (% of EU Funding, M LVL) (93%, 1 989 M LVL) (7%, 267 M LVL) (48%, 1 088 M LVL) (92%, 1 973 M LVL) *Considering that 3.3.2.1.activity Passenger train Major Projectwill not be implemented (100,1 M LVL). The negotiations are being held on the allocation of the activity funding to other projects.

15. Overcommittments by prioritiesOP «Entrepreneurship and Innovations» (M LVL, % of public funding)

16. Overcommittments by prioritiesOP «Infrastructure and Services» (M LVL, % of public funding)

17. Withdrawals and recoveriesin2011(M LVL) Most of the irregularities detected are related to different kind of contractualbreaches(total of 70%) and public procurement errors(30%) * 2% publicprocurementerrors, 7% suspicionoffraud, 90% otherirregularities ** 62,3% public procurement errors, 36,3% other irregularities,  1,4% - suspicion of fraud, potential conflict of interest

18. Progress towards strategic objectives of NSRF • Progress ofstrategicobjectives • Financial progress • Latestfiguresofthefinancial progress • Forecasts • NeedformodificationsofOP’s • Recoveriesandwithdrawals • Progress of physical implementation • Contribution to EU 2020 • Coreindicators • Mainissuesin 2013 • Youth unemployment Commission initiative

19. Contribution to Europe 2020 Strategy / LatvianNationalReformProgram

20. Overall conclusionsPhysical progress of priorities • Positive progress in general, according to plan • Very good progress: education,health and environment • Challenges in spheres: science, energy efficiency, ICT • Most of indicators are likely to be achieved Detailed information provided in part 2 (implementation by priorities)

21. Core indicatorsOP «Entrepreneurship and Innovations»

22. Core indicatorsOP «Infrastructure and services» (I)

23. Core indicatorsOP «Infrastructure and services» (II) * Indicatorcan be evaluated only after project implementation

24. Core indicatorsOP «Infrastructure and services» (III)

25. Actions to ensure performance • Financial discipline • National targets (approved by government) • Overcommittments • Financial control and supervision • Guidance • Training • Simplification • Comprehensive monitoring (monthly monitoring, quarterly reports to government)

26. National overcommittments • As a means to better implement national & EU priorities: • road infrastructure • Latgale region development plan • planned events within EC youth employment initiative • Overcommittments compensating various risks, (in case of irregularities, or eventual implementation delays)

27. Main issues • EU funds and management control system from managing authority perspective • Importance of financial instrument issue and market gap assessment • Reallocation of the Cohesion Fund financing for the passenger train rolling stock project • Financial corrections of Latvian Railway major project • Future of Cohesion Policy

28. Progress towards strategic objectives of NSRF • Progress ofstrategicobjectives • Financial progress • Latestfiguresofthefinancial progress • Forecasts • NeedformodificationsofOP’s • Recoveriesandwithdrawals • Progress of physical implementation • Contribution to EU 2020 • Coreindicators • Mainissuesin 2013 • Youth unemployment Commission initiative

29. Youth unemployment Commission initiative – ERDF activities 2.3.1.2.activity «Measures to encourage innovations and business start-ups», EU Funding: 1,7 M LV • Objective: to inform society and especially students about entrepreneurship, research and science • Responsible institution: MoE • Target by the end of planningperiod: to involve 12000 young people (in 2011 involved 5000) Target group: 15-24 years old pupils and students who are encouraged to focus on entrepreneurship, science and innovation Main activities: Ideas cup, training program «Become an entrepreneur in 5 days», seminars «Innovative start of entrepreneurship», mentoring program etc.

30. Youth unemployment Commission initiative – ERDF 3.1.1.1.activity «Modernisation of Equipment and Improvement of Infrastructure for Implementation of Vocational Education Programmes» Activity’s 1st call: • Improvedinfrastructurein 26 vocationaleducationinstitutions Activity’s 2nd call: • Government’s decision on over-commitments in the amount of 43.5 million EURon October 16, 2012; • Government’s decision on additional11 vocational education institutions that qualify to implement infrastructure improvement projects on June 12, 2012; • Draft Regulations of the Cabinet of Ministers on implementation is elaborated and it undergoes co-ordination with the social partners and interested ministries.

31. Thank you! Any Questions? www.esfondi.lv www.fm.gov.lv 31