AGP Executive Report

Baltic Energy Build-Out: Utilitas Wind has started construction near Lode (Valmiera municipality) on a 117MW onshore wind farm paired with a 60MW/240MWh battery, targeting early 2028 operations and grid balancing via the Estonia–Latvia 330kV interconnector. Defense & Drones: Latvia and Lithuania are expanding defense cooperation with Ukraine to jointly manufacture, test, and develop unmanned aerial systems, aiming to bring combat-tested drone know-how into Baltic industry. Fuel Retail Oversight: Latvia’s Economics Ministry says a proposed solidarity payment mechanism for fuel retailers should be re-evaluated after the Competition Council found diesel excise tax cuts weren’t fully passed to prices. Transport & Logistics: airBaltic reported 558,000 passengers in July (+3% y/y) and 4,786 flights (+7.4% y/y), supporting regional connectivity. Consumer & Trade: Latvia collected over €5m from the EU’s new €3 customs duty on low-value online parcels, but only about €1m reached the Latvian state budget. Infrastructure & Safety: Latvia’s harvest season brings heavy machinery risks on roads, while asbestos-containing roofing disposal rules are stressed ahead of home repairs.

Workplace Strategy: A Latvia-focused survey finds many employees feel the work environment boosts productivity and loyalty, but only 39% think employers treat it as an investment—highlighting a missed lever for competitiveness. Energy & Grid Buildout: Utilitas Wind has started construction of a 117MW wind farm plus a 60MW/240MWh battery near Lode, targeting early 2028 operations and Baltic balancing via the Estonia–Latvia 330kV link. Retail & Consumer Demand: Eurostat data shows EU retail sales growth slowed to 1.2% in June, while Latvia still posted 4.8% growth—useful context for local consumer-facing industries. Fuel Retail Expansion: Virši reports H1 results with net profit of €4.2m and turnover up 22%, driven by acquisitions and biomethane plant progress. Asbestos Safety: Latvia is reminding homeowners that asbestos-containing roofing must be handled by professionals and not crushed or dumped, with proper packaging and transport rules. Logistics & Infrastructure: Estonia completed another 26km of its eastern border infrastructure, adding surveillance masts and counter-drone capabilities. Aviation & Mobility: airBaltic carried 558,000 passengers in July (+3% y/y), supporting regional tourism and business travel. Defense Readiness: Latvia will run mobilization-center drills in Riga, Kuldīga, Valmiera and Alūksne, training 114 reservists—while regional warnings continue about possible NATO provocation scenarios.

NATO Deterrence Watch: US intelligence warns Russia may “test” NATO with a limited cyberattack or small land incursion against a member state within weeks to years, with scenarios discussed as early as autumn 2026—raising pressure on Baltic readiness and munitions. Baltic Security & Drones: Lithuania says Moscow could use captured or reconstructed Ukrainian drones for false-flag strikes on Baltic critical infrastructure to sow doubt and weaken support for Ukraine. Ukraine Air-Defense Strain: Ukraine faces a sharper interceptor shortage as deliveries fall, with Latvia’s FM Baiba Braže condemning Russia’s latest attacks. Baltic-Ukraine Drone Industry Link: Latvia and Lithuania are expanding defense cooperation with Ukraine to jointly manufacture, test, and develop unmanned aerial systems, aiming to bring combat-tested know-how into the region’s defense industry. Energy Buildout: Utilitas Wind has started construction of a 117MW wind farm plus 60MW/240MWh battery near Lode, targeting early 2028 operations and grid balancing for the Baltic system. Transport & Logistics: airBaltic reported 558,000 passengers in July (+3% y/y) and 4,786 flights (+7.4% y/y). Retail & Consumer Demand: Eurostat data show EU retail sales growth slowing to 1.2% y/y in June, while Latvia still posts 4.8% growth. Road Safety for Industry: Latvian State Roads warns drivers about harvest traffic with large agricultural machinery and ongoing national roadworks. Public Health & Housing Materials: Asbestos-containing roofing remains widespread; authorities stress safe packaging and professional removal. Mobilization Drill: Latvia will deploy mobilization centers in Riga, Kuldīga, Valmiera, and Alūksne to rehearse crisis call-up procedures for reservists. Payments Tech: Apple Account Card is rolling out in Wallet for Estonia, Latvia, Lithuania and Malta, making stored balances easier to spend in Apple services. Fuel Retail Profit: Virši says first-half 2026 net profit rose to €4.2m as turnover climbed 22% to €229.7m.

Baltic Energy Buildout: Utilitas Wind has started construction of a 117MW onshore wind farm plus a 60MW/240MWh battery near Lode (Valmiera municipality), targeting early 2028 and linking into the Estonia–Latvia 330kV interconnector. Grid & Renewables Watch: Latvia’s solar capacity has reached 1,521MW, with 601MW added so far in 2026, making this the strongest year on record for solar rollouts. Transport & Logistics: airBaltic reported 558,000 passengers in July 2026 (+3% year-on-year) and 4,786 flights (+7.4%), with load factor at 84.2%. Road Safety During Harvest: Latvian State Roads warns drivers about queues and hazards from heavy agricultural machinery, alongside ongoing restrictions on major national road sections. Public Works & Compliance: Latvia is still dealing with widespread asbestos-containing roofing; authorities urge proper packaging and professional removal, not DIY handling. Defense & Mobilization: Latvia will run crisis mobilization drills with centers in Riga, Kuldīga, Valmiera and Alūksne, training 114 reservists at the Infantry School in Alūksne (Aug 8–29). Security Risk Signal: Lithuania warns Russia may use captured Ukrainian drones for false-flag attacks on Baltic critical infrastructure, aiming to undermine NATO support for Ukraine. Consumer & Tax Pressure: Latvia collected over €5m from the EU’s new €3 customs duty on low-value online parcels, though only about €1m reached the Latvian state budget. Payments & Retail Tech: Apple Account Card support has expanded to Wallet in Estonia, Latvia, Lithuania and Malta, letting users spend existing Apple balances directly in-app and in Apple Store purchases.

Baltic Security Watch: Lithuania’s defence minister says Russia may use captured Ukrainian-made drones for “false flag” attacks on Baltic critical infrastructure, aiming to unsettle NATO and reduce support for Ukraine after drone incidents near the region. Energy & Utilities: Riga heating bills could rise by up to 20% this autumn as Riga siltums files a tariff change with a capped increase target for the fixed part, while the variable fuel-linked part is set later. Renewables Push: Latvia’s solar capacity has reached 1,521 MW, with 2026 already the strongest year on record thanks to new solar parks plus added wind and battery storage. Transport & Procurement: Riga’s ESCO street-lighting modernisation tender faces conflict-of-interest questions after documentation was prepared by an engineer with a past link to a potential bidder. Local Heat Supply: Three Latvian pellet producers sign a memorandum to prioritise pellet supply to households and adopt a transparent pricing approach amid summer availability issues and price pressure. Aviation & Business: airBaltic reports 3.013 million passengers in the first seven months of 2026 and 558,000 in July, while a Swiss staffing subsidiary still awaits licensing to start operations. Industry Finance: Storent lifts Q2 revenue to €17.7m and plans a bond offering up to €10m in the Baltic market. Mobility/Infrastructure Planning: Riga’s national stadium location remains unclear as Lucavsala is treated as a fallback while feasibility work is pending.

Baltic Security Watch: Lithuania’s defence minister says Russia may be using intercepted Ukrainian-made drones for “false flag” provocations targeting the Baltics’ critical infrastructure, with officials warning of possible escalation and tighter protection around energy and transport sites. Aviation & Jobs: airBaltic reports record demand—3.013 million passengers in Jan–Jul 2026—but a separate report questions its Swiss-based pilot staffing setup, raising concerns about social guarantees after contract changes. Latvia–Ukraine Industrial Link: Latvia’s MoD signed memoranda with Baltic Forces Ltd. and Latvian and Ukrainian partners to speed investment, technology transfer, and dual-use unmanned systems testing in Latvia. Logistics Costs: Maersk updated its Nordic-Baltic inland fuel surcharge, with Latvia set at 12% from 5 Aug, citing volatile fuel supply conditions. Food & Trade Pressure: Ukraine is seeking ways to restore grain exports after Russia’s Black Sea blockade, while the Platts wheat benchmark fell to a 13-month low amid disrupted shipping and weak demand. Energy Transition Investment: Three Seas Investment Fund backs Estonia’s Bioforce to expand biomethane production across Estonia, Latvia and Poland, aiming to quadruple capacity by 2032.

Latvia–Ukraine Defence Industry: Latvia’s MoD signed memoranda with Baltic Forces Ltd., LIAA, RTU and Ukrainian partners to speed up investment, technology transfer and dual-use unmanned systems testing in Latvia. Maritime Security & Trade: Latvia may deploy up to 20 personnel for multinational mine-countermeasure work to reopen the Strait of Hormuz, while Ukraine pushes to restore agricultural exports after Russia’s Black Sea blockade. Logistics Costs: Maersk updated Nordic inland fuel/energy surcharges for Store Door shipments: Latvia at 12% (from 5 Aug), citing volatile fuel supply disruptions. Industrial Pulse: Latvia’s industrial output rose 0.5% year-on-year in June, with manufacturing up 5.0% but electricity/gas supply down 29.8%. Energy & Markets: Platts’ wheat benchmark fell to a 13-month low as Black Sea disruptions and weak demand hit bids. Agriculture & Trade Controls: Latvia expanded its ban on imports of Belarusian/Russian food and feed products, adding dairy, meat, milling goods, oils, spices and more. Business Finance: LMT Finance received a licence to expand consumer credit services. Riga Infrastructure Drill: Rīga will run an anti-mobility engineering exercise on Ojāra Vācieša Street on 7 Aug.

Black Sea Grain Pressure: Ukraine is pushing partners to help restore agricultural exports after Russia’s blockade of the Black Sea “grain corridor,” warning the disruption could again spike global food prices and hit food security in Africa and Asia. Shipping Costs: Maersk updated its Nordic and Baltic inland fuel and energy surcharge for Store Door shipments, with Latvia set at 12% from 5 August, citing volatile fuel supply conditions. Latvian Industry Pulse: Latvia’s industrial output grew 0.5% year-on-year in June, with manufacturing up 5.0% and mining up 13.8%, while electricity and gas supply fell sharply. Air Transport Shock: Brussels Airlines froze its long-haul Airbus A330 fleet at 11 and dropped a wet-lease deal with airBaltic after a €70m first-half adjusted EBIT loss, adding pressure to the Baltic aviation market. Energy & Power: Estonia’s electricity exchange prices averaged about €44/MWh in July, up roughly 20% year-on-year, driven by lower hydropower output. Local Infrastructure: Balvi urgently needs about €80,000 to repair its swimming pool after the cover deteriorated, threatening next season operations. Finance & Credit: LMT Finance received a licence to expand consumer credit services in Latvia. Investment Pipeline: Latvia’s Major Investment Projects Coordination Council reviewed strategic initiatives, including tax incentives and an ALTUM Capital Fund to speed up high-value projects. airBaltic Funding Meeting Delayed: A bondholder meeting to discuss airBaltic’s financial future was postponed due to insufficient quorum, with a new date set for 17 August.

Airline Restructuring: Brussels Airlines posted a first-half adjusted EBIT loss of €70m, freezing its long-haul Airbus A330 fleet at 11 and dropping a wet-lease deal with Latvia’s airBaltic after a €70m first-half loss. Industrial Pulse: Latvia’s industrial output grew just 0.5% year-on-year in June as electricity and gas supply slid 29.8%, while manufacturing rose 5.0% with gains in food, fabricated metals, chemicals, electronics and machinery. Investment Pipeline: Latvia’s Major Investment Projects Coordination Council reviewed strategic initiatives, with plans for faster delivery and tools like a direct tax incentive for high value-added projects and an ALTUM Capital Fund. Energy Costs: Estonia’s electricity exchange price fell versus June but stayed ~20% higher than last July, driven by lower hydropower output. Finance for Consumers: LMT Finance received a licence to expand into non-bank consumer credit services. Waste Fees: Liepāja and south Kurzeme households face higher waste tariffs again in August, with unsorted landfill charges rising and average household costs up about 22%. Border Security: Estonia sent a third rotating unit to Latvia’s Latvia–Belarus border to curb illegal migration, with more teams planned through September. Sanctions Position: Latvia’s cabinet approved a “national position” to step up EU work on tariffs and sanctions targeting Russia and Belarus’ war economy. Timber Growth: Stiga RM Group topped €100m turnover for the first time in 2025, investing €40m in modern, higher value-added production.

Industrial Pulse: Latvia’s industrial production rose 0.5% year-on-year in June, with manufacturing up 5.0% and mining up 13.8%, while electricity and gas supply fell 29.8%. Consumer Finance: LMT Finance received a licence to expand into non-bank consumer credit services. Aviation Finance: airBaltic’s bondholder meeting failed to reach quorum and was pushed to Aug. 17, with interest payments due Aug. 14 and estimates of at least €150m in new funding needs. Energy & Storage: EU state aid cleared for Slovenia’s 370 MWh battery storage push; EBRD also backed BESS projects including in Latvia. Robotics Manufacturing: XTEND hit a milestone by producing seven robotic platforms in one week across five global sites, including Latvia, using one software system. Waste & Cities: Liepāja and South Kurzeme waste tariffs will rise again this year, with unsorted landfill charges increasing from Aug. 1. Border & Security: Estonia sent a third PPA unit to help curb illegal migration on the Latvia-Belarus border. Defense Tech: Ukraine signed drone deals with nine countries, with more in the pipeline, supporting long-term funding for defense industry.

airBaltic Restructuring: airBaltic’s bondholder meeting failed to reach quorum, pushing talks on deferring interest and raising new funding to Aug. 17, with experts expecting at least €150m in additional support needs. Defense Tech & Drones: Ukraine signed drone agreements with nine countries (15 more in the works), and Latvia is named among partners; meanwhile, Latvia and Ukraine signed memorandums on joint UAV development and security cooperation. Baltic Security Posture: Poland is preparing “Coalition of the Willing” drills with UK and France, while Lithuania is buying tunnel-detection tech after discovering Belarus-border tunnels—an escalation in border security tactics. Energy Storage & Grid Resilience: Slovenia won EU approval for €59m (370 MWh) battery energy storage state aid, and Latvia is flagged in low gas storage concerns across Europe. AI Infrastructure Push: The EU launched tenders for up to seven AI Gigafactories, aiming to unlock €20bn+ in private investment and boost Europe’s computing capacity. Tourism & Housing: LIAA and tourism stakeholders agreed new steps after international visitor numbers fell; some Latvian businesses are also considering employee housing, with Balticovo opening a staff rental block in Iecava. Logistics & Industry: DHL eCommerce plans to acquire Venipak to expand in the Baltics, and XTEND reported producing seven robotic platforms in one week across its Latvia-linked manufacturing network.

AI Infrastructure Push: The EU has launched a call for tenders to build up to seven AI Gigafactories, backed by as much as €10bn in EU and national funding, aiming to unlock at least €20bn in private investment and expand Europe’s AI computing capacity. Energy Security Watch: Europe’s gas buffer is under pressure as storage levels hit an 18-year seasonal low, with low inventories also flagged for Belgium, the Netherlands and Latvia. Baltic Defense Tech: Baltic startups are stepping up to deter Russia on NATO’s eastern flank, including work on drone guidance and other resilience-focused solutions. Microgrids & Industry Power: StarCharge was named No. 1 microgrid brand at the 2026 GGII Energy Storage Industry Summit, highlighting deployments across industrial sites and energy services. Housing for Workers: Balticovo is opening a new staff rental apartment block in Iecava after investing over €2m, targeting employer housing shortages. Logistics & Ports: Filia Dredging’s dredger Biesbosch is set to work in Latvia this summer after IHC Equipment supported inspections and optimization, with the first job at Zvejniekciems Port (Skulte). Retail Sanctions Fallout: Latvia’s MERE/Svetofor shutdown has sparked criticism from the Latvian Traders Association over government “double standards” and delayed action. Local Food Supply: Latvian watermelons are starting to hit the market later than usual, with growers citing disease pressure despite better harvest conditions. Regional Film Support: FILMLINK wrapped up a cross-border project to strengthen film development in Liepāja and Tartu, mapping locations and funding models. Sustainability Recycling: A free business tire collection campaign in Riga has been extended until 14 August, with 103.6 tonnes collected in the first week.

AI Infrastructure Push: The EU has launched a tender to build up to seven AI Gigafactories, aiming to add major computing capacity with EU and national funding (up to €10bn) and expected private investment of at least €20bn, with projects open to consortia across one or multiple member states. Logistics Deal: DHL has agreed to acquire Venipak Group, giving DHL eCommerce a fully owned parcel network in Lithuania, Latvia and Estonia, with Venipak continuing under its brand pending regulatory approvals. Maritime Tech for the Baltics: Airbus Helicopters’ U030 Flexrotor has started maritime surveillance missions for EMSA across Estonia, Latvia and Finland under a €30m framework contract, operated day-to-day by Extensee. Border Security Tech: Lithuania will buy tunnel-detection technology after Polish equipment temporarily found an unfinished passage under the Belarus border; authorities say more than ten suspected tunnel attempts have been detected and destroyed. Rail Baltica Watch: Estonia says it is still waiting for Latvia’s official position on Rail Baltica changes and timing, with discussion now pointing to September rather than August. Business Sentiment: Latvia’s business confidence improved in manufacturing, retail and services in July, but construction sentiment worsened again, hitting the lowest level since May 2025. Energy & Industry: Latvia’s Nordic-Baltic Hydrogen Corridor public consultation has begun, with meetings across municipalities and an initial study area covering 1,773 land parcels. Circular Economy: Riga’s AJ Power Recycling and 3R have extended the free business tire collection campaign “Give Tires a Second Life” until 14 August, after 103.6 tonnes were collected in the first week.

AI Infrastructure Push: The EU has opened tenders for up to seven AI Gigafactories, aiming to unlock €30bn+ in total investment and expand Europe’s computing capacity for training and fine-tuning advanced models. Logistics & E-commerce: DHL has agreed to acquire Venipak, giving DHL eCommerce a fully owned parcel network across Lithuania, Latvia and Estonia. Energy & Industry: Finland confirmed its first African swine fever case in wild boar, triggering tighter controls that could ripple through the pork supply chain. Business Climate: Latvia’s business confidence improved in manufacturing, retail and services in July, while construction sentiment fell again. Transport Infrastructure: Estonia says it is still waiting for Latvia’s official position on Rail Baltica’s future and possible plan changes. Defense Tech & Drones: Latvia will host NATO’s “Baltic Trust 26” exercise, testing unmanned and anti-drone systems with industry participation. Regional Innovation: A week of coverage highlights how the Baltics are branding themselves as startup hubs, with Latvia and neighbors drawing more funding and building defense-focused tech. Border Security: Lithuania will buy tunnel-detection technology after equipment helped uncover an unfinished passage near the Belarus border. Waste & Circular Economy: Riga’s AJ Power Recycling and 3R extended a free business tire collection campaign until 14 August.

Logistics & Trade: DHL has signed an agreement to acquire Venipak Group, giving DHL eCommerce a fully owned parcel network across Lithuania, Latvia and Estonia (deal pending approvals). Energy Infrastructure: Conexus has launched the first public consultation for Latvia’s Nordic-Baltic Hydrogen Corridor, covering 1,773 land parcels across municipalities, as the project moves into route and impact studies. Power & Grid: Latvia’s power distribution network is set to expand further, while Latvia and Sweden will study electricity interconnection to strengthen regional supply. Business Climate: Latvia’s business mood improved in July, with manufacturing, retail and services gaining confidence, but construction sentiment worsened again. Rail Baltica: Estonia says it’s still waiting for Latvia’s official position on Rail Baltica changes and timing, with discussions now pointing to September. Defense Tech: NATO’s “Baltic Trust 26” exercise will run in southern Latvia from Aug 3–14, testing anti-drone integration and interoperability with industry participation. Industrial Recycling: AJ Power Recycling and 3R Ltd extended the “Give Tires a Second Life” free business tire collection campaign until Aug 14 in Riga.

Maritime & Ports: IHC Equipment helped Filia Dredging extend the operational life of the trailing suction hopper dredger TSHD Biesbosch, with the vessel set to start dredging work this summer in Latvia’s Zvejniekciems/Skulte port area. Logistics & E-commerce: DHL eCommerce signed an agreement to acquire Venipak Group, giving DHL a fully owned parcel network across Lithuania, Latvia and Estonia (pending approvals). Energy Transition: Conexus launched the initial public consultation for the Nordic-Baltic Hydrogen Corridor pipeline in Latvia, covering 1,773 land parcels across municipalities. AI Infrastructure: The EU opened tenders for up to seven AI Gigafactories, aiming to unlock major private investment and expand Europe’s AI computing capacity. Defense & Industry: Latvia and Ukraine signed memorandums to develop, produce and test unmanned aerial systems in Latvia, targeting investment, technology transfer and dual-use testing infrastructure. Business Climate: Latvia’s business confidence improved in manufacturing, retail and services in July, while construction sentiment fell again. Power & Grid: Latvia’s power distribution network is set to expand further. Regional Security Tech: NATO’s “Baltic Trust 26” drone and anti-drone exercise will run Aug 3–14 in southern Latvia, with industry participants included.