17 years for 17 kilometres

In 2021, the Kekava bypass construction agreement kicked off the first major industrial public-private partnership (PPP) project in the Baltics. A mere two years later, the NIB-financed bypass to divert traffic from one of the busiest roads in Latvia has been completed. The Bank attended the opening ceremony to see how this 17-kilometer section improves mobility and boosts other large-scale infrastructure developments in the region.

This Friday the thirteenth feels different. It greets us with an autumn breeze and sunny skies as we make our way to open one of the most eagerly awaited sections of the Via Baltica highway. As there is still time before the ceremony, we take a drive through Kekava, a small town just on the outskirts of Riga.

In just a couple of hours, the people living here will also sense the difference this day brings. Many of the cars and cargo trucks that we still see on the narrow road will no longer have to cross this densely populated area. Instead, the heavy traffic will be diverted through a newly constructed bypass, resulting not only in a calmer environment for Kekava’s inhabitants, but also in more efficient journeys for everyone travelling through the very centre of the Baltics.

Timely completion despite challenges

On our arrival at the ceremony, we understand how greatly anticipated the bypass is. On one side of the road barriers, we are met by numerous stakeholders involved in the project; on the other, drivers are queueing to be among the first to try the new road.  

Although it only took two years from the PPP agreement to completion, the way towards this road was, in fact, much longer. “17 years and 17 kilometres – those are the numbers of the Ķekava bypass, because the first ideas for the project came in 2006,” says Mārtiņš Lazdovskis, Chairman of the Latvian State Roads at the opening.

Given such a lengthy process, it is almost surreal to see that all the construction deadlines have been met – even more so considering the external forces that could have hindered the implementation.

“I know this has been a project that has faced many challenges, starting from the Covid times when the agreements were signed, to Russia’s aggression in Ukraine which has also constrained commodity markets and the ability to deliver,” emphasises Latvia’s Transport Minister, Kaspars Briškens. “The queue that is forming on the other side of the road with cars and people waiting to take the first ride is testimony to how very well appreciated this project is.”

Saving time and the environment

Their wait is almost over. After the speeches, all that remains is to cut the ribbon. Today, this gesture feels even more symbolic than usual – not only does it open the road for traffic – together with the ribbon, it also cuts through what has long been a bottleneck for traffic across the Baltics.

Just a few minutes later, the cars are given the green light to start using the newly paved road. The symbolism does not end here – with blasts of celebration from its horn, the first car to pass us has Lithuanian number plates. For drivers like them, the Kekava bypass means fewer traffic jams and faster trips home. For the environment, it also comes with lower CO₂ emissions.

“The average waiting time on the road, for instance, if you want to get to Riga from Vilnius, is currently 30 to 40 minutes. On completion of the project, this is estimated to be reduced by 20 or 30 minutes. If we multiply this by the number of total road users, we see how many motor-hours and man-hours, and in turn also how much fuel we save. By reducing traffic jams and fuel usage, the project will also reduce the impact on the environment immensely,” Lazdovskis said in his previous interview with NIB, explaining how the bypass would reshape the Via Baltica.

Accelerating similar developments

Yet it is not only road users and the climate that will be affected by these developments. According to the stakeholders at the event, the Baltics’ largest PPP to date will have spillover effects that can span across different sectors.

“The Kekava bypass ensures smoother, faster and safer movement of people and goods in a strategically important corridor for our Baltic countries. The successful project implementation not only highlights the potential of public-private partnerships, but can also act as a showcase for other large-scale infrastructure developments in the region,” says NIB’s Vice-President and Head of Lending Jeanette Vitasp, who was part of the ribbon-cutting ceremony. NIB provided a 21-year EUR 61.1 million loan for the project alongside a similar loan from the European Investment Bank (EIB).

Expressing his gratitude to the financiers, Manuel Ravara Cary, CEO of TIIC, the project’s private partner, shares a similar view. “Ķekava bypass shows how things can be done. It is a landmark project in a country which has not done a lot of PPPs, and the first deal of hopefully many more to come,” he says. “What we see is an infrastructure that is built with the highest quality standards, with all the ESG elements embedded, with all the sustainability elements embedded.”

The Kekava bypass has increased the speed limit from the previous 70 km per hour to 120 km per hour in this section of the Via Baltica. While it still is difficult to say whether new infrastructure developments will come at a highway pace, the cooperation and lessons learned from this project can help to navigate the best routes towards them.