ISPA Measure No:2003/LV/16/P/PA/008

FINANCING MEMORANDUM

of Agreed between the European Commission and the Republic of Latvia Concerning the grant of assistance from the Instrument for Structural Policies for Pre-accession to the following measure Technical Assistance for environment sector in Latvia

The European Commission, hereinafter referred to as “the Commission”, acting for and on behalf of the European Community, hereinafter referred to as “the Community” represented by the Acting Director General for Regional Policy, Mr. Graham Meadows, for the Commission

on the one part, and

The Government of Republic of Latvia, hereinafter referred to as “the beneficiary”

on the other part,

HAVE AGREED AS FOLLOWS:

Article 1

The measure referred to in Article2 below shall be implemented and financed out of the budgetary resources of the Community in accordance with the provisions set out in this Memorandum. The measure referred to in Article2 below shall be implemented in line with the General Conditions annexed to the Framework Agreement signed between the Commission and the beneficiary and supplemented by the terms of this Memorandum and the provisions annexed hereto.

Article 2

Identification of the measure

The Instrument for Structural Policies for Pre-accession shall contribute, by way of a grant, towards the financing of the following measure as described in Annex I:

Measure number: 2003/LV/16/P/PA/008

Title: Technical Assistance for environment sector in Latvia

Duration: Start date: The date of signature of the financing memorandum by the Commission

End date: Until 31 December 2007

Location: All regions in Latvia

Group: Technical Assistance

Article 3

Commitment

1. The maximum public or equivalent expenditure which may be taken into account for the purpose of calculating assistance shall be e 19 866 892.

2. The rate of Community assistance granted to the measure is fixed at 75 % of total public or equivalent expenditure as indicated in the financing plan in Annex II.

3. The maximum amount of assistance from the Instrument for Structural Policies for Pre-accession is fixed at e 14 900 169;

4. An amount of e 11 920 135 is committed from the 2003 budget under budgetary line B7-020. Commitments in respect of subsequent instalments shall be based on the initial or revised financing plan for the measure, subject to the state of implementation of the measure and to budgetary availability.

Article 4

Payments

Community assistance shall cover payments on the measure for which legally binding commitments have been made by the beneficiary and for which the requisite finance has been specifically allocated. These payments must relate to the services described in Annex I.

Payments made before (date of signature of financing memorandum by the Commission) shall not be eligible for assistance from the Instrument for Structural Policies for Pre-accession.

The measure described in Annex I and payments by the body responsible for the implementation of the measure shall be completed no later than 31st of December 2007. The report required for the payment of the final balance should be submitted not later than 6 months after this date.

The advance payment is fixed at e 2980,000, which shall be transferred as follows:

— An amount of e 1 490 000 is paid out after signature of this memorandum by the beneficiary;

— The remainder is paid out following the signing of the first technical assistance contract and provided there is full and satisfactory compliance with the condition stated in article 8(2) of the Financing Memorandum.

Article 5

Respect of Community law and policies

The measure shall be carried out in compliance with the relevant provisions set out in the Europe Agreements and shall contribute to the achievement of Community policies, in particular those concerning environmental protection and improvement.

Article 6

Intellectual property

The Beneficiary and the authority responsible for implementation mentioned in AnnexI point3 shall ensure that they acquire all necessary intellectual property rights to studies, drawings, plans, publicity and other material made in conjunction with planning, implementation, monitoring and evaluation of the project. They shall guarantee that the Commission, or any body or person delegated by the Commission shall have access and the right to use such material. The Commission will only use such material for its own purpose.

Article 7

Permits and authorisations

Any type of permits and or authorisations required for the implementation of the measure must be provided by the competent authorities of the Beneficiary in due time and in accordance with national law.

Article 8

Specific conditions related to the measure

Without prejudice to the general provisions specified in Annex III the Community grant for the measure is subject to the following conditions:

(1) Condition on viability

The Community grant for the measure is subject to the authorities concerned making available sufficient resources in order to ensure the effective operation and maintenance of the assets.

(2) Condition relating to the second instalment of the advance payment

The second instalment of the advance payment is conditional on presentation by the Ministry of Environment of Latvia of the information on project implementation arrangements for SALACA RIVER Basin Management Plan and in particular access for River Basin Authority, Latvian Environmental Agency and consultant responsible for execution of this assignment to the Geographic Information System (GIS) owned by North-Vidzeme-Biosphere Reserve. As well as confirmation from the Ministry of Environment that the relevant number of additional licences for using of software to established and run GIS for this project will be provided by Latvian Authorities

(3) Terms of References related to the services contract are subject to the prior approval of the Commission

(4) The presence of a project in Annex I does not constitute in any way a commitment of the Commission to grant financial support for furthers technical assistance or the construction phase of the project.

Article 9

The implementation provisions described in the Annexes to this financing memorandum form an integral part of it.

Non-compliance with the conditions and implementation provisions shall be dealt with by the Commission according to the procedure stipulated in AnnexIII.1. SectionVIII.

Article 10

The authentic text of this financing memorandum is the present document as signed hereunder.

List of Annexes