The European Fund For Strategic Investments (EFSI) is a unique program initiated by the European Commission and European Investment Bank to boost investments and pave the way for lending in the EU. The European Investment Fund (EIF) is part of the EFSI, and its self-stated goal is “strengthening European investments to create jobs and growth. It does so by making smarter use of new and existing financial resources, removing obstacles to investment, providing visibility and technical assistance to investment projects.”

Investment Financing for Latvia SMEs

As part of this effort, the European Investment Fund and UniCredit Leasing have partnered to provide funding sources for small and medium-sized enterprises (SMEs) in the Baltic states. Over the course of the next two years, SME applicants from Latvia, Lithuania and Estonia will be considered for loans and leases expected to total EUR 18 million.

Enda McNamara, spokesperson for the European Commission, underscores that in order to qualify for EFSI financing, projects must be:

• Economically and technically sound
• In qualifying EFSI sectors (per Article 9 of the EFSI Regulation)
• Contributing to EU objectives, including sustainable growth and employment
• Mature enough to be bankable

Latvia Real Estate Growth

For those looking for market opportunities in real estate, Latvia is a viable option. Latvia’s largest city, Riga demonstrates that real estate is growing, posting a 9.75% year-over-year growth at the end of 2016. Meanwhile, apartment prices in cities throughout Latvia are on the rise with Ogre showing a 7.5% increase in 2016, Kauguri and Salaspils a 12.4% increase and Jelgava a 9.6% increase. Additionally, BALSTS reports the total volume of real estate deals increased 10.5% year-over-year 2015 to 2016. In fact, the Latvian housing index went up several index points from second to third quarter 2016, increasing from 136.31 to 138.51. However, BALSTS reports a January 2017 slowing in number of total transactions, due to the flurry of activity in December 2016.

Additionally, demand outweighs supply in the office space arena, and it’s costing the country in terms of international businesses setting up a presence in Latvia. Beginning in 2015, investors began to sit up and take notice of this need. A PricewaterhouseCoopers and OberHaus 2016 real estate report on the Baltic States underscores this by revealing that inside investors from the Baltic States and outside investors from Scandinavia began to show interest initially, followed by investors from the US. The report reveals that demand outweighs supply for office spaces that are well-planned, energy efficient, spacious and modern. Tenants seekings such spaces include law firms, technology businesses, marketing businesses and financial firms. A Colliers report confirms these findings by providing similar information.

Why Latvia for Investing?

Latvia is poised for growth and investment. Along with a growing real estate market, Latvia offers ease of accessibility to large markets and suppliers, a skilled workforce, a developed infrastructure, macroeconomic and political stability and innovative R&D.

Cornfield & Partners has experience assisting those looking to evaluate market opportunities in construction, manufacturing and other sectors in large scale and also small to medium sized businesses in Latvia, Lithuania and Estonia. Contact us on info@cornfieldpartners.com or call us on +44 (0) 20 7692 0873 to get more information.

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