The fund was established in 1994 as part of the agreement between the Latvian state and Tilts Communications to promote development of small and medium businesses and create new work places.
"This was pioneer work. It was the first time Norway invested in a fund abroad, and we are very satisfied with how the money was used," said Kristin Jorgensen, first secretary at the Norwegian Embassy in Latvia.
Although the money came from Norway, the Latvian management decided where to invest it.
Raimonds Jonitis, the fund's board chairman, said the fund has a strong policy that prohibits it from owning a majority package of shares in a company. It is also never to invest in real estate, trade or agriculture.
"We achieved what we wanted. We invested in companies that produce and can compete and we saved work places and created new ones," Jonitis said.
As of mid-September, the fund has invested 1.5 million lats ($2.6 million) in 22 Latvian companies, ranging from food processing firms to furniture manufactures. The companies employ 1,438 people.
Jonitis said the fund saved the fish processing company Carnikava from going underwater. In 1995, the company incurred 43,000 lats worth of losses, but the new strategy and the fund's investment helped Carnikava to become a profitable company in two years.
In 1997, it earned 226,000 lats and in a year received an EU certificate that allows exports to Europe.
Imants Kreslins, board chairman of the bakery Kvitekss, admitted the fund's investment helped to increase the company's output 10 times.
The Norwegian government positively evaluates the fund's work, and King Harald V during his early September visit to Latvia granted one million Norwegian kroons ($133,000) for the fund's further development.
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