On 4 June this year, the shareholders’ meeting approved the Letter of Expectations of the Riga City Municipality, in its capacity as the shareholder, setting out the objectives for Rīgas ūdens SIA for the medium-term strategy period until 2030. The Letter of Expectations sets out six financial objectives and eight non-financial objectives, which will serve as the basis for the implementation and updating of the company’s Strategy 2030, as well as for its annual planning.

The Letter of Expectations stipulates that during the Strategy 2030 period, Rīgas ūdens SIA must ensure stable and sustainable financial management, enabling the implementation of the investment programme while maintaining the availability and quality of services, including setting an EBITDA margin of no less than 40% for the next period and a socially responsible tariff objective. This means that the Affordability ratio — the cost of water management services as a share of average household disposable income in the Riga region — must not exceed 1.2%, while the average affordability benchmark in EU countries is 2%.

Taking into account that water management is critical municipal infrastructure, the Letter of Expectations also places particular emphasis on the resilience of Rīgas ūdens SIA to technical, climate and cybersecurity risks, as well as on business continuity in crisis situations. At the same time, the non-financial objectives set out in the Letter of Expectations provide for improving water quality and wastewater treatment, reducing GHG emissions, modernising and renewing networks, ensuring the sustainable use of resources, increasing customer and employee satisfaction, and developing digitalisation and innovation.

The financial and non-financial objectives set for the company also define the following priority development areas:

• systematic renewal of ageing infrastructure;

• compliance with wastewater treatment requirements, including the initiation of improvements to capacity and treatment levels in line with the new EU Urban Wastewater Treatment Directive;

• increasing renewable energy generation, reducing energy consumption and lowering GHG emissions;

• digitalisation of governance and customer service processes, development of telemetry and self-service solutions, and assessment of opportunities for implementing AI tools.

The Letter of Expectations also states that, in implementing the tasks set out in Strategy 2030, resources are to be directed towards ensuring the core functions of water management — the provision of safe and uninterrupted services, infrastructure sustainability and fulfilment of obligations — while maintaining financial stability.

The shareholder expects a diversified approach to financing sources to be maintained for the implementation of investment projects, including the use of capital market instruments, bonds, including green bonds, financing from international lenders, EU funds and other instruments. The importance of maintaining an investment-grade credit rating is also emphasised, as it provides opportunities to attract financing on favourable terms.

Rīgas ūdens SIA will continue to comply with the dividend regulation set by Riga City Council for the period until the 2030 reporting year, while retaining a significant share of profit for the implementation of the company’s development projects.

The company’s overall strategic objective remains to ensure customer-oriented, continuous, safe, high-quality, accessible and economically justified water management services, the sustainable and secure use of Riga’s most important water resources, and the management of strategically important infrastructure, as well as to promote public involvement in the prevention of water pollution.

The full text of the Letter of Expectations is available here.