• The survey highlights that Latvian firms hold a positive outlook on the investment environment, despite viewing the climate transition more as a risk, rather than an opportunity.
  • Barriers to investment include concerns about energy costs, uncertainty about the future, and shortages of skilled labour.
  • The EIB Group is supporting the green and digital transition in Latvia, with €82 million in new commitments signed in 2023.

Firms in Latvia remain optimistic about their investment plans in the months ahead, according to the EIB Investment Survey. The survey, which reflects the sentiments of businesses in Latvia, shows that 76% of firms invested in the previous year, and a larger share of firms expect to increase investment, despite facing greater financial constraints compared to the EU average (15% vs. 6.2%).

Despite the positive outlook on the investment environment, there are still barriers and challenges facing the Latvian economy. Firms are particularly concerned about energy costs (89%), uncertainty about the future (87%) and shortages of skilled labour (91%). The country’s deteriorating demographic outlook is also a barrier to investment, as it exacerbates shortages of skilled labour going forward and puts pressure on the healthcare and pension systems.

The survey reveals that Latvian firms are less positive about transitioning to stricter climate standards and regulations. They view it more as a risk (26%) than an opportunity (16%), with the proportion of those seeing it as an opportunity being lower than the EU average of 29%.

While around 68% of Latvian firms are taking action to reduce greenhouse gas emissions, only 29% have set and monitor relevant targets. The main actions taken by these firms include investing in energy efficiency (41%), waste minimisation and recycling (35%), new/less polluting business and/or technology (31%), and sustainable transport options (29%).

The full investment survey can be found here.

“While Latvian firms maintain their optimism towards investment, it is concerning to see the persisting worries surrounding the green transition,” said EIB Vice-President Thomas Östros. “It is crucial for stakeholders to address these concerns and embrace the opportunities presented by sustainable practices. By setting and monitoring relevant targets, investing in green technologies, and overcoming barriers such as energy costs and skilled labour shortages, Latvian firms can pave the way towards a more resilient and prosperous future. We at the EU bank are ready to support this.”

In 2023, the European Investment Bank (EIB) Group, which also includes the European Investment Fund (EIF), provided €82 million in financing for projects in Latvia. The EIB committed financing to Latvijas Mobilais Telefons SIA (LMT) to support the rollout of 5G technology nationwide, and also signed an agreement with Luminor Bank AS to facilitate additional lending to small businesses, with a specific focus on supporting the green transition.

The investment in Latvia is part of the nearly €1 billion of EIB Group financing provided in the country over the past five years. Overall in the Baltics, the EIB Group provided total financing of nearly €1.3 billion in 2023, including €654 million for Lithuania and €540 million in new commitments for Estonia.

Background information

EIB

The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. It finances sound investments that contribute to EU policy objectives. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion, and support a just and swift transition to climate neutrality.

The EIB Group, which also includes the European Investment Fund (EIF), signed a total of €88 billion in new financing for over 900 projects in 2023. These commitments are expected to mobilise around €320 billion in investment, supporting 400 000 companies and 5.4 million jobs.

All projects financed by the EIB Group are in line with the Paris Climate Accord. The EIB Group does not fund investments in fossil fuels. We are on track to deliver on our commitment to support €1 trillion in climate and environmental sustainability investment in the decade to 2030 as pledged in our Climate Bank Roadmap. Over half of the EIB Group’s annual financing supports projects directly contributing to climate change mitigation and adaptation, and a healthier environment.

Approximately half of the EIB’s financing within the European Union is directed towards cohesion regions, where per capita income is lower. This underscores the Bank’s commitment to fostering inclusive growth and the convergence of living standards.

About the report

The EIB Group Investment Survey, which has been administered since 2016, is a unique, annual survey of some 13 000 firms. Data were collected in mid-2023 from firms in all EU Member States. The survey also includes a sample of firms in the United States. The survey collects data on firm characteristics and performance, past investment activities and future plans, sources of finance, financing issues and other challenges that firms face, such as climate change, digitalisation and international trade.