Latvian government blocks wind farm project, risking hundreds of millions in damages

On Tuesday, August 25, Latvia's Cabinet of Ministers decided not to approve SIA "K2 Ventum"'s plan to build a 46-turbine wind farm in the Saka parish of Dienvidkurzeme municipality, along with the necessary power grid connection spanning Dienvidkurzeme and Kuldīga municipalities. The project, valued at several hundred million euros, had spent years going through approval procedures, with government sign-off being the final remaining step.

In 2021, the State Environmental Bureau ordered an environmental impact assessment for the project, examining effects on nature, birds, landscape and residents. The assessment concluded with a positive opinion, but the final decision rested with the Cabinet, which ultimately rejected the proposal.

The Ministry of Climate and Energy stated there is currently insufficient legal and factual grounds to issue a favorable administrative act allowing the project to proceed. It cited the absence of a repeat public consultation that the government had requested, as well as continuing disagreement over whether wind farm construction is permissible within the protected coastal zone of the Baltic Sea and the Gulf of Riga.

Ministers push back

Several ministers opposed the decision. Agriculture Minister Uldis Augulis said the company had completed all required procedures lawfully and warned of a real risk that it could sue the state for damages. He also noted that documents for the Cabinet meeting were received only shortly before it began, and that the Ministry of Justice had not approved the draft order.

Economy Minister Viktors Valainis called the decision a political rejection of nearly half a billion euros in investment, warning it could damage Latvia's investment climate and investor confidence. He pointed out that other wind energy projects already operate in the Dienvidkurzeme region, raising questions about consistency in decision-making.

Justice Minister Edvards Smiltēns confirmed his ministry had not approved the draft order and said he had warned colleagues about legal risks, adding that litigation over the matter would not be a surprise.