Of the projects launched this year, 13 are in Rīga, nine in Kurzeme, three in Latgale, two in Vidzeme and one in Zemgale. Traditionally, Rīga has the largest number of projects, but Kurzeme, Latvia's westernmost region, is not far behind, with the cities of Liepāja and Ventspils doing particularly well.
Looking at the results of foreign investment attraction in the first six months of 2024, it is noticeable that higher value-added producers and service providers are entering Latvia.
“This is largely due to wage growth in the national economy, as we can no longer compete with significantly cheaper labor costs. We are more competitive in the skilled labor segment than in the so-called simple professions, which require many employees for relatively lower wages,” said Laura Strovalde, Deputy Director for Investment and Energy of the Investment and Development Agency of Latvia (LIAA).
With the rapid development of the smart energy sector, CTE Wind International, a French onshore wind turbine foundation design company, has started operations in Latvia. The company has offices in Poland, Spain, Portugal, the USA, Australia, Brazil, Vietnam, France and now Riga.
NLS Mix Technologies, a Ukrainian company, is in the process of establishing an animal feed production facility in Ventspils.
The bioeconomy industry is also developing, with several projects currently underway, using biorefinery to extract high added value products from biomass. In June, the Golden Fields Alternative Protein facility was opened in Liepaja, with an investment of EUR 16 million, and in October, the Asns Ingredient project will be launched in Jelgava, with a planned investment of more than EUR 100 million. Work is also continuing with Estonian investor Fibenol, which plans to invest up to EUR 700 million to build one of Europe’s most advanced biorefineries in Latvia, where biomass will be used to produce a range of industrial products to replace those derived from fossil fuels.
“There are currently another 200 potential investment projects in various stages of readiness, with an investment volume of EUR 10.5 billion. Experience to date shows that at least a fifth of incoming projects are implemented. The expected EU economic recovery in the second half of the year and the reduction in interest rates will speed up project implementation, which will make it easier to attract financing,” said Strovalde, adding that the average investment project takes three years to complete.
The development of the housing market, especially in the regions, is a key issue, as in many municipalities it is the lack of suitable housing that is the limiting factor in attracting investment.
“LIAA aims to attract investment of EUR 660 million in 2024 and to increase this to EUR 1 billion over the next three years. To achieve this goal, it is essential to prioritise the process of attracting investment throughout the public administration, as well as to review the tax policy to stimulate municipalities to think more about creating jobs in their territory,” said Strovalde.
In 2023 as a whole, In 2023, 46 investment projects were launched with the direct involvement of LIAA, which were estiated to bring EUR 618.9 million into the Latvian economy and provide 2,513 new jobs.
