At the Cabinet of Ministers (CoM) meeting on 22 December, an informational report was acknowledged regarding the need to ensure the continuation of the Baltic Innovation Fund (BIF1), which serves as a platform for developing the local capital market and provides necessary capital to local companies. The initiative foresees that each Baltic state will invest up to EUR 50 million, while the European Investment Fund (EIF) will contribute at least EUR 75 million, thus creating a total available BIF3 investment amount of at least EUR 225 million—EUR 69 million more than in the BIF2 round.
The Baltic Innovation Fund (BIF1) began operations in 2013. The second round (BIF2) was launched in 2019 as a collaborative initiative between financial institutions in Latvia, Lithuania, and Estonia—namely AS “Finanšu institūcija Altum,” INVEGA (currently ILTE), KREDEX (currently EIS), and the European Investment Fund (EIF).
“The decision to ensure the continuation of the Baltic Innovation Fund is a significant investment in the region’s development and future. By establishing BIF3, we are strengthening the local capital market and ensuring that Baltic companies have access to stable and sustainable growth financing. The investments made are a clear demonstration of our commitment to building a dynamic, innovation-driven economy,” emphasizes Minister of Economics Viktors Valainis.
In the BIF1 round, Latvia’s commitment amounted to EUR 25.2 million, resulting in EUR 76.5 million reinvested into Latvian companies. In the BIF2 round, Latvia’s commitments reached EUR 13.3 million, with EUR 51.8 million reinvested into Latvian companies.
Under the BIF1 fund, by 31 December 2024, 83 companies were supported, 13 of which are located in Latvia. The BIF2 portfolio consists of eight funds, with 61 investments as of 31 December 2024.
It is planned that the BIF3 fund will be managed by EIF, which has over 30 years of experience in the sector and manages more than 700 sub-funds. Based on the experience gained from managing BIF1 and BIF2, EIF will be able to effectively coordinate BIF3 activities as well.
Within BIF3, investments are planned in micro, small, medium-sized companies, and mid-cap companies (up to 3,000 employees), both through equity and quasi-equity (mezzanine loans) investments.
The BIF3 initiative plans to establish and invest in approximately ten sub-funds, mainly focusing on private capital, supporting new and locally established teams, as well as teams from outside the Baltic region with strategic investments in the Baltics.