In the eight months of this year, the Investment and Development Agency of Latvia (LIAA) has attracted eight investment projects in the amount of EUR 73 million. 459 jobs will be created in these companies. At the same time, LIAA noted that several more investors are close to making a decision whose total investment amount could exceed EUR 100 million.
This year, investment projects have been launched in such sectors as biomedicine, energy, smart materials, electronics, and business services. Investors represent countries such as the United States, Great Britain, Switzerland, Sweden, Norway, Ukraine, and Lithuania.
The total investment project portfolio of LIAA's clients has reached EUR 5 billion, divided into approximately 150 active projects.
The Minister of Economy Ilze Indriksone notes that, despite the economic development challenges of recent years, which were significantly affected by the Covid-19 pandemic and, since February 24 of this year, Russia's aggression against Ukraine, LIAA has managed to implement investment attraction projects that will not only contribute to the Latvian economy by creating new jobs and taxes in the state budget, but will also help transform the economy by developing the so-called smart specialization industries, where the emphasis is on technologically advanced products and innovations.
The minister positively assesses the fact that investments have flowed into the entire territory of Latvia, confirming the trend that manufacturing companies mainly expand their operations outside of Riga.
Director General of LIAA Kaspars Rožkalns says that the pandemic and the war in Ukraine have created a lot of turbulence, which has shaken the market. "Certain countries have become toxic under the current conditions, so many companies are looking for new geographical directions. This is a good opportunity for both Latvia and the Baltics as a whole. For a while, after the start of the war, there were fears that the interest of investors might decrease due to security reasons, but these concerns were only partially confirmed and most of the previously started projects have not lost their relevance," Rožkalns explains, noting that the interest of investors has even increased, however, it should be expected that the time until a decision is made, will also increase, as investors evaluate the new risks much more carefully.
Rožkalns points out that we are currently faced with a strategic decision on how to respond to the interest of companies of Western origin that want to relocate their companies from Russia and Belarus.
The current trends confirm that Latvia and the Baltic States as a whole still retain their attractiveness from investors' point of view. According to the data of the auditing company EY, in 2021, Latvia ranks tenth in Europe in terms of the number of new projects per million inhabitants, while Lithuania was in 11th place and Estonia in 24th place. This year, Riga ranked 37th in Europe as the most attractive city for investments in the next three years. Riga shares this place with Geneva and Turin but is ahead of, for example, Glasgow, Valencia, and Stuttgart.
Rožkalns also mentions that in order to promote faster economic growth, LIAA mainly focuses on investment projects with high added value. The industries represented by the companies, the potential remuneration, the level of digitization, and the planned investments in research and development are evaluated. "We are also trying to maintain a balance between support measures for new investors who are just entering Latvia and those who are already working here and have proven themselves,'' Rožkalns emphasizes.
Among the companies that have entered Latvia this year is the Swedish technology company Anodox Energy Systems, which intends to develop an electric car battery production plant in Riga. As another example, LIAA cites the Ukrainian company Enamine, which is the world's leading supplier of chemical compounds and related services in the pharmaceutical industry. The entry of this company will strengthen the rapidly growing biomedical ecosystem.