New money targets SMEs

RIGA - The agreement signed between the venture capital investor BaltCap and the European Investment Fund (EIF), which has made 30 million euros available to Latvian small and medium-sized companies, is strategically significant for the Latvian economy, said Economy Minister Artis Kampars (New Era) on Jan. 22, reports news agency LETA. The EIF signed an agreement with the venture capital company BaltCap making this 30 million euros available to Latvian enterprises. BaltCap now becomes one of the first venture capital fund managers within the framework of the EIF’s ‘Jeremie’ initiative.

Over the next two years, this money will be available to Latvian enterprises, according to BaltCap investment strategy, of which 20 million euros will be financing from the EIF’s Jeremie fund, with 10 million euros of investment from BaltCap, this money originating in the private sector. “This is a strategically significant agreement which will stimulate Latvia’s economic development… I believe that the money will be invested in small and medium-sized enterprises which are export-oriented, competitive and innovative,” stressed Kampars.

The investment period will run until 2013, with funding to be made available to around 15 - 20 companies, meaning an average of 3 - 5 investment operations a year. “The fund for small and medium-sized enterprises will provide investment for the starting up and development of companies, and the volume of investment will be from 300,000 euros to 3 million euros, and should generally be provided in several stages. Investments are planned in manufacturing, the service industry, information technology and telecommunications. Support will also be given in spheres which are underdeveloped according to European Union standards, as well as in renewable energy and public services,” said BaltCap investment manager Astra Neimane.

Companies will be evaluated according to various criteria, for example, team experience and professionalism, local and international demand for a product or service, development potential, and shareholding distribution strategy.