Translated using ChatGPT service.
Today, the Ministry of Economics and ALTUM launched two new support programs for entrepreneurs. Loans with a capital discount of up to 30% will be available for manufacturing innovations, including dual-use products for security and defense, while research and development projects will have access to loans with a low fixed interest rate of 0.9% to 1.9%. The total funding available for both support programs is up to EUR 100 million.
“The programs presented today mark a significant step forward in the development of Latvian entrepreneurship. With EUR 100 million in support co-financed by the European Regional Development Fund (ERDF), our entrepreneurs will become more competitive, innovative, and bold in their future plans. It is especially important that the support is targeted both at research and development and at products that can serve national security and defense needs. This approach strengthens our economy while contributing to a safer country overall,” said Minister of Economics Viktors Valainis.
Loans under both programs will be granted to projects implemented in one of the RIS3 areas of the Smart Specialisation Strategy. Eligible applicants include small and medium-sized enterprises (SMEs), as well as large enterprises with no more than 3,000 employees. Both programs will be implemented with ERDF co-financing, although each has different conditions.
“ALTUM already has extensive experience in financing companies through loans with a capital discount, and we see that entrepreneurs actively use this support. Today, we’re taking a step further by launching a program focused on innovative products, including dual-use products – an area that is especially important under current circumstances. We are now offering loans of up to EUR 5 million for such projects, with a capital discount of up to EUR 1.5 million. In this initiative, we are collaborating with the Ministry of Defense and the Latvian Science Council, our expert partners in innovation and dual-use product development. For research and prototype development, we are launching a new program starting today with a very low fixed interest rate of 0.9% to 1.9%. This is a highly beneficial solution that I strongly encourage entrepreneurs to use. I invite businesses to actively seize these opportunities for growth and development,” said ALTUM Chairman of the Board Reinis Bērziņš.
Loans with Capital Discount for Manufacturing Innovations
The program for manufacturing innovations, including dual-use products for security and defense, is implemented in cooperation with the Latvian Science Council and the Ministry of Defense. To promote the development of dual-use projects, priority will be given to applications for the development of innovative products intended for security and defense. ALTUM will initially accept these applications at the beginning of the program, while applications for other types of projects will be accepted starting 40 working days later.
“The advancement of Latvia’s defense industry is rooted in innovation and close cooperation between businesses, the state, and the scientific community. These support programs are a major step toward enhancing security and technological independence. By promoting high value-added technological development here in Latvia, we are simultaneously strengthening our security and economic growth,” said Minister of Defense Andris Sprūds.
“Latvian scientists are already working within companies and contributing directly to the creation of new products. More and more companies are also actively engaged in innovation – a strong foundation on which to build the next stage of development. The greater the innovation intensity, the more sustainable and resilient the company. Businesses that invest in R&D export products with significantly higher added value. Productivity growth in Latvia is also closely linked to innovation, particularly in manufacturing, ICT, and the bioeconomy,” said Lauma Muižniece, Director of the Latvian Science Council.
To apply for ALTUM support, companies must submit an opinion from either the Ministry of Defense or the Latvian Science Council confirming that the planned product is innovative. If the product is intended for dual (civilian and military) use, this application must be approved by the Ministry of Defense. This confirmation is a mandatory part of the ALTUM application.
Key facts about the program:
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Loan amount: EUR 300,000 to EUR 5,000,000
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Capital discount: up to 30% of the ALTUM loan amount, but not exceeding EUR 1,500,000
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Loan term: up to 15 years
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Interest rate: from 2.7% + 6-month EURIBOR
Loans for Research and Development (R&D) – without capital discount
The R&D program aims to promote the creation of innovative products. It will help expand the knowledge base, including understanding of people, cultures, and societies, which may serve as the foundation for the development of new, innovative solutions. In addition, the program will help reduce or eliminate scientific and technological uncertainties that hinder development. Importantly, this program also acknowledges that the research may not necessarily lead to a marketable product.
Key facts about the program:
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Loan amount: EUR 300,000 to EUR 1,000,000
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Loan term: up to 3 years
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Fixed interest rate: 0.9% – 1.9%
More information:
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Loan program for the development of innovative products: https://www.altum.lv/inovativu-produktu-izstradei/
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Loan program for research and development: https://www.altum.lv/petniecibai-un-attistibai/
About ALTUM:
The Development Finance Institution ALTUM is a state-owned company of the Republic of Latvia that provides support to specific target groups through state aid financial instruments (loans, guarantees, venture capital investments, etc.) within specific programs, also complementing them with non-financial support (consultations, mentoring), as well as implementing other state-delegated functions.
In June 2017, ALTUM received a long-term credit rating of Baa1 from the international credit rating agency Moody’s, confirming its stable financial standing. On October 24, 2017, ALTUM’s bonds were listed on the regulated market – the Nasdaq Riga Baltic Bond List. ALTUM received the "Stock Exchange Event of the Year in Latvia" award at the Nasdaq Baltic Awards 2019.