Translated using ChatGPT service.
On Tuesday, July 15, the government approved the Action Plan for Attracting Investment and Improving Access to Finance in the National Economy, developed by the Ministry of Economics (MoE).
The goal of the plan is to increase the level of capital attraction in Latvia to match that of Lithuania and Estonia by 2029.
As a result, the stock of loans issued to Latvian non-financial corporations should grow to 17% of GDP (compared to 14% or EUR 5.6 billion in 2024), and the total volume of accumulated foreign direct investment in the equity capital of Latvian companies should reach EUR 32 billion (compared to EUR 22.5 billion in 2024).
“Foreign capital attraction is a key priority; therefore, the Ministry of Economics has defined specific tasks that must be completed within a set timeframe. We will ensure that the Investment and Development Agency of Latvia, the national development institution ALTUM, banks, and other involved institutions do everything possible to achieve the outlined goals,” said Minister of Economics Viktors Valainis.
To achieve the plan's objectives, 15 tasks have been identified, targeting both investment attraction and financing accessibility. Active implementation of these tasks is already underway. Notable initiatives include preparing a proposal for the creation of an international partnership-oriented fund, which would offer foreign investors reliable and competent intermediary services for scaling projects across various sectors in Latvia (a concept similar to one implemented in Denmark), and establishing an ALTUM equity fund by attracting investments from private pension fund managers.
Implementation of the plan is being approached proactively. The government has already approved amendments to the technology transfer support program proposed by the MoE and administered by the Investment and Development Agency of Latvia. These amendments provide support for the development of early-stage business ideas within the higher education and research sector and their transfer to spin-off companies (new enterprises created by splitting off from existing companies). Additionally, support for increasing business productivity has been expanded, and the task related to changes in the pension fund management remuneration system—intended to promote more active investments in Latvia—has been completed. The draft law "Amendments to the State Funded Pensions Law" has been adopted by the Saeima.
Work is also progressing on several other plan objectives, such as developing a regulatory “sandbox” environment to foster innovation and attract new market participants. Another significant ongoing effort is the preparation of an assessment for the introduction of a unified creditor supervision and control institution, aimed at reducing bureaucracy and enhancing system transparency.
In addition to the aforementioned, the following tasks are also being implemented:
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Developing and updating Latvia’s economic profile and investment portfolio offer;
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Promoting public-private partnership (PPP) projects in Latvia;
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Ensuring financing for the development of scalable investment projects in Latvia;
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Developing an ALTUM co-financing support platform to invest in Latvian small and medium-sized enterprises (SMEs);
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Establishing a clear framework for the development of corporate bonds;
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Evaluating the possibility of introducing an export credit insurance model in Latvia.
Latvia is actively pursuing investment projects that provide high value-added products and services, with particular focus on knowledge-intensive bioeconomy, smart energy and mobility, and information and communication technologies.
According to preliminary estimates by the Ministry of Economics, the total cost of implementing all planned measures is expected to be around EUR 270 million, potentially resulting in EUR 2.4 billion in attracted private investment.
The plan was developed in cooperation with the Ministry of Finance and the Bank of Latvia. During its development, consultations were held with representatives of banks, industry associations, ministries, and other institutions.