AGP Executive Report

Public Health & Compliance: Latvia’s Plant Protection Service found unauthorised GMO “Norfolk Purple” tomato seedlings and ordered destruction, highlighting EU-wide limits on GMO circulation. Agri-Business: Balticovo opened a €120m egg production complex in Iecava, adding cage-free capacity and a year-round egg transport system. Retail & Infrastructure: Riga Central Market’s meat pavilion was ordered to close immediately after a State Construction Control Bureau inspection, with the city council set to fund roof reinforcement. Weather & Risk: Latvia issued yellow and orange warnings for severe thunderstorms, heavy downpours, strong gusts and hail risk. Tourism Pressure: Eastern Latvia’s Blue Lakes region is seeing booking cancellations as visitors fear stray Ukrainian drones, squeezing hundreds of small tourism businesses. Defense & Tech Cooperation: Latvia signed a drone cooperation deal with Ukraine, while NATO allies continue pushing for better counter-drone capabilities. Regional Security Context: A coalition including Latvia condemned Iran’s “lethal plotting” and malign actions across Europe and beyond. Business Finance: Eleving Group will pay EUR 4.29m in dividends to shareholders, continuing its semi-annual payout policy.

Port & Transit Watch: Latvia’s Economy Minister met stevedoring firms to push port competitiveness, discuss governance reform and investment, and weigh extending a reduced diesel excise tax as diesel prices stay elevated. Defense Industry Deals: Ammunity (Latvia) signed a letter of intent with Poland’s Mesko to strengthen ammunition supply-chain resilience across the Baltic-Nordic region. Drone Security Cooperation: Latvia signed a drone agreement with Ukraine during the Nordic-Baltic summit in Tallinn, while Estonia opted for a declaration without a drone deal; Zelenskyy said Ukraine can share low-cost interceptor know-how and training. EU Sanctions Direction: The European Commission proposed a new Russia sanctions package including an entry ban for Russian military personnel since 2022, plus further curbs on industrial sectors, banking and crypto assets. Local Market Regulation: Riga Central Market’s meat pavilion was ordered to close immediately after a State Construction Control Bureau inspection flagged technical issues. Capital Markets: LAU Infra Group kicked off Latvia’s first IPO of a state-owned company, offering shares at €1.57 (subscription June 10–19). Energy & Infrastructure Finance: EBRD and Morocco’s ONEE agreed a €250m financing programme for drinking-water production modernisation, signed during EBRD annual meetings in Riga. Corporate Returns: Eleving Group will pay €4.29m in dividends for H2 2025.

Latvia-Ukraine Defense: Latvia and Ukraine signed a new Drone Deal in Tallinn, focused on drone production, air defense and missile defense cooperation, plus technology and experience exchange to strengthen Latvia’s protection against drone threats. Nordic-Baltic Summit: At the same Tallinn gathering, Nordic and Baltic governments backed Ukraine’s swift EU accession while stressing Russia as the main Euro-Atlantic threat and pledging higher defense investment. Local Economy & Trade: Latvia’s foreign trade turnover rose 12.6% year-on-year in April to €4.13bn, with exports up 13.9% and imports up 11.4%, improving the trade balance. EU Sanctions Push: The European Commission outlined a new Russia sanctions package, including a proposal to ban entry for Russian military servicepeople involved since the 2022 invasion and further curbs on sectors and the “shadow fleet.” Payments & Fintech: DECTA was named in The Payments Power 50 2026, highlighting its end-to-end payments platform and €1bn+ annual transaction volume. Business Tech Expansion: Microshare added 31 languages to its EverSmart™ Pest and Clean AI tools, aiming to speed adoption for multilingual customers in Europe and Asia. Aviation Connectivity: Wizz Air plans to roll out Starlink onboard connectivity across its A320 fleet in 2027, joining airlines already using the service. Tourism Under Pressure: Reuters reports drone alerts are hurting tourism in Latvia’s Land of Blue Lakes, with cancellations affecting hundreds of small businesses near the Russian border.

Latvia-Ukraine Defense: In Tallinn, Latvia and Ukraine signed a new Drone Deal to deepen defense cooperation, including sharing Ukraine’s drone and air-defense know-how and supporting joint production and an integrated air-defense system. Nordic-Baltic EU Push: Nordic and Baltic governments backed Ukraine’s swift EU accession at a summit in Tallinn, tying it to Euro-Atlantic security and pledging higher defense investment. EU Sanctions Plan: The European Commission proposed a new Russia sanctions package, including an entry ban for Russian military personnel who served since the 2022 invasion, plus further curbs on sectors, banking, crypto assets and the “shadow fleet.” Latvia Economy Watch: Latvia’s inflation accelerated in May to 3.5% year-on-year, driven mainly by housing/utilities and services like restaurants and accommodation. Telecom Deal Scrutiny: Latvia’s PM says he’s awaiting more information from the economy minister on Telia’s planned share acquisitions of LMT and Tet, with advisers including J.P. Morgan. Payments & Fintech: DECTA was named to The Payments Power 50 2026 for end-to-end payments, citing over €1bn in annual transaction volume. Energy Storage: Rolls-Royce and Sunly advanced Latvia battery storage plans, while other regional BESS supply deals highlight growing demand for grid-scale storage. Rail Baltica Risk: Latvia’s Rail Baltica schedule and financing sustainability were discussed in Estonia’s anti-corruption committee, with attention on whether decisions stay on track for completion by 2030.

Latvia’s Telecom Push: LMT plans to invest EUR 38 mln in network upgrades in 2026, adding 10 new base stations and upgrading more than 200, while continuing work on 5G Standalone in commercial mode. Public Media Tech Upgrade: Redge Technologies will build a new unified audio and video streaming platform for Latvian Public Service Media, a EUR 2.6 mln deal over 3.5 years aimed at easier access across web, mobile and smart TVs. Cross-Border Tax Cooperation: Latvia’s State Revenue Service signed memorandums with Ukraine and Lithuania to align tax rules with EU standards, share digital service know-how, and fight the shadow economy, including VAT-gap reduction. E-commerce Sanctions Enforcement: Latvia’s regulator NEPLP ordered access restrictions to Wildberries.ru and several other Russian sites, citing content linked to Russia’s war and annexation narratives, with ISP blocks and a one-month appeal window. Regional Business Investment: Agrova Baltics is investing EUR 30 mln in Alūksne to expand egg production capacity by 56% to about 280 mln eggs per year, with new laying hen houses and upgrades to grading and packing. Aviation Connectivity: Wizz Air signed a Starlink satellite internet agreement to equip its fleet from 2027, joining airBaltic and other European carriers already rolling out the service.

Latvia’s Telecom Push: LMT plans to invest EUR 38 mln in 2026 to upgrade network infrastructure, adding 10 new base stations and upgrading more than 200, while continuing 5G Standalone development. Public Media Tech Upgrade: Redge Technologies will build a unified audio and video streaming platform for Latvian Public Service Media in a EUR 2.6 mln deal over 3.5 years, with first features expected by year-end. Cross-Border Capital Markets: Riga hosted progress on a single Baltic capital market concept, with EBRD support aimed at deeper integration and better access to finance for firms, including SMEs. Trade & Security: Latvia is tightening enforcement against illicit cigarettes by targeting equipment suppliers and supply routes, as border detections fall but illegal volumes rise. EU Policy Fight: Nine EU governments including Latvia oppose a Brussels plan to impose electric-vehicle quotas on large corporate fleets, arguing uneven readiness could hurt competitiveness. Jobs Snapshot: Latvia reported 2.2% of positions vacant in Q1 2026, with vacancies down year-on-year. Aviation & Tourism: Tallink’s Romantika returns to the Tallinn–Stockholm route from 2 July, adding weekend sailings and summer entertainment cruises.

Fertilizer & trade security: A new warning flags how fertilizer disruptions could hit food security and keep feeding Russia’s war economy, with Latvia urged to watch transit and supply-chain shifts closely. Rīga school catering procurement: Rīga City Council amended school and kindergarten catering rules after challenges over “green” criteria, after complaints that the wording didn’t guarantee organic/local suppliers would actually deliver. eID microchip snag: Latvia’s eID electronic signature use is set to be affected for 346,456 people after a French chip certification expiry; a six-month extension runs to Dec 9, but the issue is still unresolved. Underwater infrastructure defence: Latvia joined a 17-country initiative launched in Singapore to protect critical underwater cables and energy links, aiming for shared principles and cooperation. EU policy & visas: 11 EU countries, including Latvia, pushed the European Commission for tighter Schengen visa rules for Russians, citing rising tourist visas and loopholes. EBRD in Riga: The EBRD annual meeting in Riga focused on resilience, green/digital transformation and conflict-affected economies, with Latvia-linked regional finance cooperation also highlighted. Latvia-Russia pharma exports: Latvia’s pharmaceutical exports to Russia remain significant, with industry saying reorientation takes time and that pharma is not broadly sanctioned.

EBRD in Riga: The European Bank for Reconstruction and Development used its annual governors’ meeting to push conflict-affected recovery and resilience, with Azerbaijan’s first deputy economy minister backing longer-term rebuilding that also revitalises private business. Pan-Baltic finance push: The EBRD also signed a memorandum with Estonia, Latvia and Lithuania to deepen a unified regional capital market and aim for higher MSCI Emerging Market status. Armenia funding boost: Ameriabank and FMO agreed a EUR 120m loan facility to expand MSME lending in Armenia, with at least 25% earmarked for green projects and a focus on women, young entrepreneurs and rural/agri firms. Latvia pharma exports to Russia: Latvia’s pharmaceutical exports to Russia have fallen from EUR 94.5m (2021) to about EUR 76m last year, with industry linking growth mainly to Russian inflation and price changes rather than new product expansion. Energy storage debate: Baltic energy experts warned that solar-driven near-zero prices can hurt project payback unless storage (BESS) and new demand, including data centres, scale up. Migration politics: Latvia said it will not accept migrants under the EU solidarity mechanism, choosing alternative support as a new framework takes effect on June 12. Visa pressure on Russians: 11 EU countries, including Latvia, urged stricter Schengen visa rules for Russians, citing high tourist visa issuance despite the war in Ukraine.

EBRD in Riga: The UAE’s Ministry of Finance joined the EBRD Board of Governors meeting in Riga, using the “Advancing Economic Governance” session to stress market stability, supply-chain resilience and energy/food security amid conflict-driven shocks. Baltic energy storage push: Baltic energy stakeholders say the region needs more grid-scale battery energy storage (BESS) as solar output can drive prices near zero, with experts also floating the idea of attracting large data centers to boost demand. Latvia’s defense message to NATO: Foreign Minister Baiba Braže told NATO to stay focused on collective defense and deterrence, calling for deployable forces, resilient supply chains and investment in air defense and drone capabilities. EU visa tightening for Russians: 11 EU countries, including Latvia and Estonia, urged the European Commission to tighten Schengen visa rules for Russian citizens, citing rising tourism despite the war in Ukraine. Armenia trade fallout hits EU response: EU leaders pledged over €50m in emergency support for Armenia after Russia expanded restrictions on Armenian exports, with plans to help reroute goods including flowers to Latvia. Sunly x Rolls-Royce battery deal: Sunly and Rolls-Royce Power Systems agreed to build four large battery storage systems in Latvia (490 MWh), aiming to strengthen grid balancing as renewables scale up.

EBRD in Riga: The UAE joined the EBRD Board of Governors meeting in Latvia, using the platform to push for stronger economic governance and resilience amid conflict-driven supply-chain shocks. Energy Storage Push: Sunly and Rolls-Royce Power Systems signed a deal for four 490 MWh battery energy storage systems in Latvia, aiming to solve the “realization” problem for fast-growing Baltic solar by adding grid balancing capacity. Baltic Power Market Reality: EBRD forum discussions warned that solar can drive prices near zero in some hours, making storage and new demand sources like data centers key to improving project payback. Latvia Pre-Election Rules: Latvia’s 120-day Saeima pre-election period starts, with KNAB stressing tighter controls on political advertising and hidden campaigning. Armenia Trade Fallout: The EU is preparing over €50m in emergency support for Armenia after Russia expanded restrictions on Armenian exports; the plan includes easier access for agri-food and help finding buyers, with shipments of flowers routed via Latvia. MSME Green Finance: Ameriabank and FMO signed a EUR 120m loan agreement in Riga to expand lending for Armenia’s MSMEs, with at least 25% earmarked for green projects. NATO Deterrence Message: Latvia urged NATO to keep its focus on collective defense and deterrence, calling for deployable forces, resilient supply chains, and continued investment in air defense and drones.

EBRD x EU Boost: The EBRD and the EU expanded InvestEU guarantees by up to €478.4mn at the bank’s Riga annual meeting, aiming to unlock higher-risk green, digital and infrastructure projects across EU economies, with €11.4mn for advisory support. Latvia Energy Storage Deal: Sunly and Rolls-Royce Power Systems signed contracts for four Latvia battery energy storage systems totaling 490 MWh, with the first Valmiera hybrid site due in early 2027 and cybersecurity compliance cited as key to the European supplier choice. EBRD Backs Conflict-Affected Economies: EBRD president Odile Renaud-Basso said the bank will keep scaling support for Ukraine and Middle East countries facing instability, trade disruption and geopolitical pressure. Pay Transparency Deadline Pressure: A new EU Pay Transparency Directive is due by 7 June 2026, but several countries are still lagging; the rules target more salary openness to help narrow the EU gender pay gap. Armenia Aid After Russian Curbs: EU Commission chief Ursula von der Leyen said Europe is preparing an emergency package of over €50m for Armenia after Russia imposed export restrictions, including help for agri-food and flowers. Latvia IPO Watch: Bank of Latvia approved LAU Infra Group’s IPO prospectus; subscriptions start June 10 at €1.57 per share, with plans to list on Nasdaq Riga. Biomethane Financing: EBRD approved a €26m loan to Next Biogas to convert a Lēdurga plant into a biomethane facility, supporting renewable gas output and replacing imported natural gas.

Energy Storage Deal: Rolls-Royce Power Systems has signed contracts with Sunly for four Latvia battery energy storage projects totaling 490 MWh, with the first site in Valmiera due online in Q1 2027; Sunly cited EU cybersecurity rules (NIS2) as a key reason for choosing a European supplier. Capital Markets: Bank of Latvia has approved the IPO prospectus for LAU Infra Group AS; subscriptions start June 10, with up to 6.4m shares offered at €1.57 each and a planned listing on Nasdaq Riga. Green Finance: EBRD approved a €26m loan to Next Biogas (Host Group) to convert a biogas plant in Lēdurga into a biomethane facility targeting about 80,070 MWh annually, with support via InvestEU guarantees. Riga’s Finance Spotlight: The EBRD’s 35th Annual Meeting and Business Forum runs in Riga June 5-7, focusing on competitiveness, digitisation, governance, and support for Ukraine and Moldova. Cyber & Identity: iDenfy added Smart-ID to its identity verification platform for Latvia, Lithuania and Estonia, enabling customer verification without physical document checks during onboarding. Security Cooperation: Latvia and Ukraine are drafting a long-term defence deal covering drone tech, air defence, cybersecurity and defence-industry integration. EU Trade Pressure on Armenia: EU leaders announced €50m+ in immediate support for Armenia after Russian export restrictions; a first shipment of 5,500 roses has been exported to Latvia. Aviation Watch: Riga Airport warned passenger growth could be hit if direct routes to Dubai and Tel Aviv aren’t restored by year-end, while fuel price rises remain the biggest near-term drag.

Armenia–Latvia Trade: The first shipment of 5,500 Armenian roses has been exported to Latvia, with EU officials saying the move supports Armenia’s push to diversify markets after Russia tightened restrictions. EU Sanctions Response: European Commission President Ursula von der Leyen announced an EU support package for Armenia worth over €50m, plus trade-easing measures for agri-food and practical help for affected sectors like floriculture, with a planned 10,000-flower delivery to Latvia. Latvia Capital Markets: Latvia raised €1bn via a seven-year sustainable government bond sale, priced at a 3.525% yield, to fund climate and social goals. EBRD in Riga: The EBRD annual meeting and business forum is underway in Riga, focusing on Baltic competitiveness, resilience, infrastructure, digitisation and support for Ukraine. Energy & Renewables: Sunly opened a 54 MW solar park in Valmiera as part of a hybrid solar-wind-battery plan (up to €100m total), while Latvenergo plans to donate decommissioned power equipment to help rebuild Ukraine’s energy infrastructure. Local Finance Watch: Latvia’s finance ministry backed Rēzekne’s stabilization progress but said it’s not yet stable enough to end the process, while Valka’s case is also under review. EU Mobility Policy: A coalition of 11 EU states, including Latvia, is pushing for stricter visa rules for Russian tourists ahead of summer.

Latvia’s Funding Push: Latvia’s State Treasury raised €1bn via a 7-year sustainable bond issue, with a 3.525% yield, backing transport, biodiversity and social inclusion goals. Industrial Momentum: Latvia’s industrial production rose 7.0% year-on-year in April, with manufacturing turnover up 9.5% as domestic and non-domestic sales both increased. Energy & Grid Resilience: Sunly opened a 54 MW solar park near Valmiera and flagged a EUR 100m hybrid build-out, while Sunly and Rolls-Royce signed a major battery storage deal across the Baltics. EV Charging Expansion: Latvia-linked EU momentum continues as the EIB partners with Ireland to speed up nationwide public EV charging rollout. Defence & Security: France scrambled jets 11 times in a week under NATO’s Baltic Air Policing, and Latvia’s President warned security risks are rising amid Russian unpredictability. Rail Baltica Scrutiny: Latvian Radio reported complaints of bullying and aggressive management at Rail Baltica’s implementing unit, with the labour inspectorate involved. Visa Tightening: Latvia backs a push for tougher Russian tourist visa rules across 11 countries, aiming to stop “shopping weekends.” Armenia Trade Support: The EU pledged over €50m to help Armenia after Russia’s export restrictions, including a flower shipment route to Latvia.

Baltic Fintech Spotlight: At Baltic Fintech Days in Riga, Magnetiq Bank’s CEO Jakub Wieclaw and other leaders pushed the case for embedded finance, faster onboarding, and compliance that scales—while speakers debated what “real” fintech innovation looks like under MiCA and payments regulation. Aviation & Connectivity: airBaltic’s losses topped €70m in Q1, and management flagged a potential €100–150m funding need for the 2026/27 winter; separately, the airline restored a seasonal Riga–Aberdeen link twice weekly. Defence Industry Update: Latvia’s Ammunity named Kaspars Pollaks as new CEO from 1 June, aiming to boost output and strengthen end-user cooperation. Regional Security: NATO counter-drone testing in Latvia highlighted both progress and the hard reality that interceptors must work reliably every time. Local Life & Transport: Daugavpils city festival (June 5–7) brings extra public transport and free rides, with tram service paused in the centre late at night for safety. Geopolitics With Business Impact: Ukraine’s drone wave hit St Petersburg ahead of Putin’s SPIEF forum, disrupting mobile internet and briefly closing Pulkovo—underscoring how war risk is now directly shaping investment calendars.

Ukraine–Russia Escalation: Ukrainian drones hit St Petersburg’s oil and naval areas just hours before Putin’s flagship economic forum, disrupting Pulkovo Airport and prompting air-raid alerts across Latvia and Estonia. airBaltic Funding Crunch: Latvia’s transport minister says the carrier may need extra state support this summer as Q1 losses top €70m; the new government is weighing options, with a decision expected this summer and a €100m–€150m winter-season funding gap flagged. Rail Baltica Cost Pressure: RB Rail warns Latvia’s new government must urgently close Rail Baltica financing gaps; unit costs in Latvia are reported more than double Estonia’s, with redesign or timeline extension on the table. EBRD Growth Warning: The EBRD cut growth forecasts for the Baltics, citing Middle East energy shocks, weaker demand, and cost pressures—Latvia’s outlook now 2.0% for 2026. Defence Industry Moves: Ammunity, Latvia’s ammunition maker, named a new CEO (Kaspars Pollaks from 1 June). Counter-Drone Focus in Latvia: A NATO-linked drone test in Latvia highlighted both interceptor progress and the difficulty of reliable drone takedowns. Logistics & Connectivity: 4RCargo was appointed Finnair Cargo GSA for Estonia, Latvia and Lithuania, aiming to boost Baltic cargo links via Helsinki. Local Business & Services: Latvijas Pasts will buy 40 new vehicles (including electric cargo vans) for courier deliveries, while Daugavpils expands and makes public transport free during its city festival.