The Baltic States have jointly established a new investment mechanism to support local enterprises, involving significant contributions from each country and the European Investment Fund.
The newly formed Baltic Innovation Fund showcases a collaborative effort by Estonia, Latvia, and Lithuania, each contributing 50 million euros, while the European Investment Fund (EIF) adds another 75 million euros. This total generates a fund that invests in various local businesses through approximately ten professional private funds tasked with deploying these funds effectively. An announcement regarding the third application of such a fund reflects ongoing confidence in the economic impact of these initiatives, with projections of over 200 million euros in tax benefits and the creation of more than 1,200 new jobs.
Reinis Bฤrziลลก, the chairman of the Development Finance Institution 'Altum', emphasizes the potential yield from these investments, noting significant returns in previous funding rounds. In the first phase, Latvia invested 25.2 million euros, resulting in 76 million euros reinvested back into local enterprises. The second phase saw a reduction in direct state obligations to 13.3 million euros but still managed to channel 51.8 million euros into Latvia's local businesses, illustrating the effective leverage these funds hold.
As the third phase unfolds, adjustments have been made to the investment rules for the first time, indicating a progressive strategy aimed at enhancing the capacity for investments. This evolution in the fund's structure signifies a robust commitment from the Baltic States to boost their economies through deliberate support for local industries and entrepreneurs, strengthening the region's economic resilience and innovation ability as they navigate current market challenges.
