AGP Executive Report

Aviation & Infrastructure: Riga International Airport’s Supervisory Board has confirmed Normunds Feierbergs to its board, with responsibility for strategic finance and information tech, as the airport plans infrastructure development alongside passenger growth. Energy Efficiency: The Origo shopping centre expanded its use of an AI building-management system, cutting energy costs by over €132,000 and reducing energy use and CO₂. Forestry & Timber Supply: Latvijas valsts meži (LVM) bought nearly 5,000 hectares of productive forest in Latgale from Swedish owners for about €26.4m, aiming to secure long-term sustainability and higher-quality timber resources. Transport & Logistics Tech: CarrierTrust, a Latvia-based startup, launched an EU-focused reputation network to help transport firms assess partners via structured B2B reviews and risk signals before cooperation. Sanctions & Cyber Security: The EU moved to sanction FSB-linked hackers over a long-running cyberespionage and critical-infrastructure sabotage campaign. Cross-border Trade Controls: A Lithuanian investigation alleges Starlink terminals and drone-related engines were shipped to Russia via the Latvian border using false declarations. EU Policy: New packaging and packaging-waste rules are set to take effect on Aug 12, reshaping requirements for recycling and reuse.

Forest & Timber Investment: Latvia’s state forest company LVM bought nearly 5,000 hectares of forest land in Pasienes parish (Ludza region) from Swedish owners for just over €26m, aiming to secure long-term wood supply for the Latvian economy. Packaging & Consumer Goods Regulation: New packaging and packaging-waste rules take effect Aug 12, expanding what counts as packaging (including tea bags and mascara brushes) and tightening limits on “substances of concern,” plus new recycling and reuse requirements. Energy Storage & Grid Flexibility: Futureal Energy Partners acquired two Riga battery energy storage projects from Aretis Group—45 MW / 120 MWh total—with construction starting in July and operations targeted for November. Baltic Sea Environment: Summer tourism along the A1 coast is again colliding with overflowing rubbish bins and a lack of toilets at state road parking lots, renewing calls for fixes. Tech for Industry & Security: XTEND secured a U.S. patent for drone autonomy that keeps unmanned aircraft on a destination set by operators, even in complex environments. Regional Security Signals: Latvia joined a 14-country statement reaffirming the 2016 South China Sea arbitration as final and legally binding, as China rejects the ruling.

Baltic Energy & Grid Security: Latvia is part of the push to fully decouple from Russian power and stay synced with the EU market, with the Continental Europe Synchronous Area now credited for ending energy dependence on Russia/Belarus. Energy Storage Investment: Futureal Energy Partners bought two Riga battery storage projects from Aretis Group—45 MW/120 MWh total—aiming for construction in July and operations by November, a sign of fast-growing Baltic flexibility demand. 5G Infrastructure Race: Tele2 secured new Lithuanian spectrum (700 MHz, 1500 MHz, and renewed 2100 MHz) for €9.8m, extending licenses to 2042 and setting up competition on 5G Standalone rollout across the Baltics. Defense Industry & Financing: NATO summit fallout keeps moving: Canada’s push for a Defense, Security and Resilience Bank gained commitments including Latvia, while Turkey decided not to join “at this stage,” and NATO also plans joint procurement of Saab GlobalEye for AWACS replacement—relevant to regional defense tech and logistics. South China Sea Diplomacy: Latvia joined a 14-country reaffirmation that the 2016 arbitration ruling is final and legally binding, while China rejects it—another reminder of how international law disputes intersect with security planning. Animal Welfare & Food Markets: Estonia’s cage-free pledge by 2035 is complicated by cross-border pricing pressure from Latvia and Lithuania, with producers weighing whether bans would just shift demand.

Baltic Power Integration: Lithuania, Latvia and Estonia have fully ended dependence on the Russian and Belarusian grids and are now synchronized with the EU’s continental electricity market via Poland—an energy resilience push that still leaves Cyprus isolated and paying higher bills. Grid Flexibility & Smart Metering: As wind and solar expand, Europe is leaning on smart meters to balance supply and demand and cut waste, with battery storage scaling up as the next big lever. Food Industry Transition: Estonia’s cage-free egg pledge is moving forward, but producers say a unilateral ban would just shift demand to cheaper cage eggs imported from Latvia and Lithuania. Telecom & 5G Rollout: Tele2 won new spectrum in Lithuania (700MHz, 1500MHz and renewed 2100MHz) for coverage and capacity through 2042, setting up a 5G Standalone race. Energy Storage Growth in the Baltics: Lithuania reports rapid battery storage connections in 1H 2026, pushing total storage capacity on the grid higher and signaling more renewables coming online. Maritime Security: The 10-nation Joint Expeditionary Force agreed a new maritime proposition to make naval cooperation more integrated across the North Atlantic, High North and Baltic regions. Latvian Business & Services: Virši completed the takeover of 17 Astarte-branded service stations, expanding its network to 101 while reconstruction and rebranding continue. Public Safety Procurement: Latvia’s ambulance service equipped all crews with body armour and helmets to improve protection during crises.

Latvian Emergency Readiness: Latvia’s State Emergency Medical Service says all ambulance crews are now equipped with body armour and helmets, alongside new vehicles and regional support centres, citing the current geopolitical situation and staff safety needs. Energy & Industry: Virši has completed the takeover and branding integration of 17 former Astarte service stations, bringing its network to 101 sites after reconstruction and identity updates. Aviation Skills: Swiss AMAC Aerospace will open an aircraft maintenance training academy in Basel from January 2027, aligned with EASA Part-147 and Part-66 licensing pathways. Baltic Tech & Telecom: Tele2 won new 5G spectrum in Lithuania (700MHz, 1500MHz and renewed 2100MHz) for network expansion through 2042, setting up a push toward 5G Standalone. Local Business & Trade: Latvia’s industrial production and manufacturing rose in May, while Latvia’s inflation eased to 3.4% in June and the Finance Ministry revised macro forecasts. Riga Diplomacy: More than 90 Latvian honorary consuls from 44 countries will meet in Riga mid-July to discuss foreign policy, security priorities and consular cooperation.

EU Recovery Watch: The EU Council approved Hungary’s revised recovery and resilience plan, unlocking up to €10bn in funding, with payments tied to milestones and anti-corruption and procurement reforms. NATO & Defence Industry: NATO allies agreed to jointly procure up to 10 Saab GlobalEye aircraft to replace aging AWACS, while the alliance also pushed a broader defence union debate and new maritime cooperation under the Joint Expeditionary Force. Ukraine Procurement Deal: The EU is set to allow Ukraine to use a €60bn loan for equipment bought directly from British manufacturers, with details expected next week. Latvia in the Security Mix: Latvia’s State Emergency Medical Service equipped all ambulance crews with body armour and helmets, alongside new vehicles and support centres. Telecom & Infrastructure: Tele2 won 5G spectrum in Lithuania (700MHz, 1500MHz and renewed 2100MHz) for network expansion through 2042, setting up competition for 5G Standalone. Aviation Skills: AMAC Aerospace announced an aircraft maintenance training academy in Basel starting January 2027. Business & Trade: Latvia’s industrial production and manufacturing rose in May, while Latvia’s inflation eased to 3.4% in June. Energy & Renewables: Lithuania reported rapid growth in energy storage connections, with battery capacity scaling sharply in 2026. Local Economy & Culture: Riga will host a major trombone festival in late July, and Latvia’s Virši completed the takeover of 17 Astarte-branded service stations.

OSCE Moscow Mechanism: A new report says Russia’s militarization and indoctrination of Ukrainian children is a systemic state policy and a crime against humanity, describing forced integration into education, propaganda, and paramilitary training. Telecom & Connectivity: Tele2 won 5G spectrum in Lithuania for €9.8m, securing licenses through 2042 and setting up a push for 5G Standalone. Defense Finance: Türkiye will not join Canada-led plans for a Defense, Security and Resilience Bank at this stage, even as Latvia is among the founding countries aiming for operations in 2027. NATO Industrial Push: NATO plans to buy up to 10 Saab GlobalEye radar aircraft to replace aging AWACS, with Latvia among participating states. EU Recovery & Procurement: The EU approved a revised recovery plan for Hungary worth up to €10bn and also backed amendments to Latvia’s plan. Latvia Economy: Latvia’s Finance Ministry cut growth forecasts for 2026-27 and raised inflation, citing energy and supply-chain pressures. Energy & Infrastructure: Lithuania’s grid added 752 MW of renewables and rapidly growing battery storage in H1 2026, with storage capacity now at 0.7 GW. Logistics Costs: Maersk revised inland fuel surcharges for the Nordics, lowering rates for Latvia and Estonia while warning weekly reviews may shift with gas storage trends. Aviation Training: AMAC Aerospace will open an aircraft maintenance training academy in Basel starting Jan 2027. Riga Business & Diplomacy: More than 90 Latvian honorary consuls from 44 countries will meet in Riga mid-July, with a business networking event on the agenda.

Defence Industry & Procurement: NATO allies in Ankara agreed to move ahead with joint procurement of up to 10 Saab GlobalEye airborne radar aircraft, replacing aging E-3 systems; Latvia is among the participating states, with deliveries targeted from 2030. Security Finance: Canada’s NATO summit push for a Defence, Security and Resilience Bank gained commitments from eight countries including Latvia, aiming to raise up to $134bn for defence and security financing. Latvian Economy: Latvia’s Finance Ministry cut growth forecasts for 2026–2027 to 2.0% and lifted inflation projections to 3.6% for 2026, citing higher energy prices and greater uncertainty; the budget deficit outlook also worsened. Energy & Logistics: Maersk revised Nordic inland fuel/energy surcharges effective July 8, with Latvia at 3% (down from earlier levels), while warning winter risk remains if gas storage stays below norms. Transport Infrastructure: Latvian Railways’ platform modernization is facing major delays and cost increases, with the Aizkraukle line hit hardest after a contractor was removed. Food & Agriculture: Latvia’s strawberry harvest is starting earlier than last year, while rain has damaged cherries, pushing growers to salvage what they can. Local Industry: Virši completed the takeover of 17 former Astarte-branded service stations, expanding its network to 101 sites. Public Safety: Latvia’s ambulance crews have been equipped with body armour and helmets to improve protection during crisis situations. Aviation Demand: Airbus forecasts demand for 42,060 new aircraft over 2026–2045, driven by urbanisation and rising passenger numbers. Energy Transition Watch: Lithuania’s grid-connected battery storage grew sharply in H1 2026, reaching 0.7GW installed capacity. Consumer & Tech: Fi Ultra launched as a Starlink-connected smart dog collar, designed to keep tracking working beyond cellular dead zones. Trade & Compliance: Latvia is pursuing cases tied to Starlink kit smuggling to Russia, underlining sanctions pressure on satellite-linked equipment.

Latvia’s Economy Watch: Latvia’s Finance Ministry cut its 2026–2027 growth forecasts to 2.0% and lifted inflation to 3.6% (2026), warning of wider budget deficits and higher debt as energy prices, supply disruptions and geopolitical uncertainty bite. NATO & Defence Industry: At the Ankara NATO summit, allies reaffirmed Article 5 and pledged at least $140bn in military aid for Ukraine, while Trump said the US will license Ukraine to manufacture Patriot systems—an industrial step that could reshape regional air-defence supply chains. Border Security: Latvia’s Prosecutor General flagged a shortage of undercover officers as corruption schemes go undetected, while the State Border Guard warned migrant smugglers are getting more aggressive, with daily attempts to breach the border. Rail Infrastructure: Latvian Railways’ platform modernization is running into major delays and cost overruns, with work halted on parts of the Aizkraukle line. Health Tech: RTU unveiled an AI data server to speed cancer diagnosis and tailor treatment using large datasets. Food & Agriculture: Organic dairy brand Bryunaļa will be discontinued from July 10 due to unprofitability, ending regular sales in Latgale and Riga. Local Defence Tech: SUBmerge Baltic signed a cooperation memo with Naval Group to improve underwater drone interoperability for allied navies. EU Rules Impacting Industry: The European Commission launched infringement cases against Latvia and others over restrictive mandatory authorisation/certification rules for energy installation and construction services.

NATO Summit in Ankara: NATO leaders reaffirmed Article 5 and pledged at least $140bn in military aid for Ukraine, while pushing faster defence capability development and deeper defence-industry cooperation. Patriot Production Shift: The US said it will license Ukraine to manufacture Patriot air-defence systems, a major boost for Kyiv’s long-running push for local production. Latvia-Linked Defence Industry: Latvia’s SUBmerge Baltic signed a cooperation memo with France’s Naval Group to improve underwater drone interoperability for allied navies. Border Security Pressure: Latvia’s Border Guard chief warned migrant smugglers are getting more aggressive, with thousands stopped this year and more violent attempts to breach the border. Rail Infrastructure Troubles: Latvian Railways’ platform modernization is facing severe delays and higher costs, with contractors terminated on the Aizkraukle line. Air Travel Outlook: Airbus forecasts global passenger traffic will more than double by 2045, supporting demand for more efficient aircraft. Healthcare Tech Upgrade: RTU unveiled an AI data server to speed cancer diagnosis and tailor treatment using large-scale computing. Corruption Probe Bottleneck: Latvia’s Prosecutor General said corruption cases are being missed due to a shortage of undercover operational officers. AirBaltic Credit Watch: Fitch put airBaltic’s long-term rating on watch negative over liquidity risk. Freight Job Cuts: LDz Cargo plans layoffs of 300 as rail freight volumes shift amid sanctions and higher Russian rail tariffs. Energy Market Scrutiny: The EC launched infringement steps against Latvia and others over restrictive mandatory authorisation/certification rules for energy installation and construction services. Pellet Supply Tension: Latvia’s minister called pellet shortages and price spikes “absurd,” urging producers to prioritise domestic demand.

Patriot Production Boost: At the NATO summit in Türkiye, US President Donald Trump said the US will license Ukraine to manufacture Patriot air defence systems, a major step toward faster local output and stronger missile defence. Latvian Rail Job Cuts: LDz Cargo plans 300 layoffs starting 1 August, citing shifting rail freight volumes, sanctions impacts and higher Russian railway tariffs affecting export and transit cargo. Pellet Supply Pressure: Latvia’s energy minister called pellet shortages “absurd” and urged domestic producers to prioritise household demand, increase capacity and keep pricing transparent after renewed supply gaps and price spikes. Defence Industrial Cooperation: Finland, Norway and Latvia signed a statement of intent on Patria TRACKX armoured tracked vehicles, exploring joint development and procurement. Energy Infrastructure: Lithuania, Latvia and Germany seek EU PCI status for the Baltic–German PowerLink undersea electricity link, targeting completion in 2037. Inflation Watch: Latvia’s consumer inflation eased to 3.4% in June, with transport costs cooling after earlier spikes. Healthcare Investment: Riga East University Hospital’s oncology centre reconstruction is set to cost €63m over two years, after a major internal relocation.

Baltic Grid Upgrade: Lithuania, Latvia and Germany are pushing for EU PCI status for the Baltic–German PowerLink undersea electricity link, aiming to speed approvals and unlock EU funding for a 2 GW, ~600 km cable with a target 2037 completion. Defence Finance for Industry: Romania joined the Canada-led Defence, Security and Resilience Bank (DSRB), with Latvia among founding backers, to mobilise low-cost capital for defence and security projects and industrial capacity, targeting operations in 2027. NATO Procurement Push: NATO selected Saab’s GlobalEye to replace part of the ageing Boeing E-3 AWACS fleet, with up to 10 aircraft planned and Latvia among participating nations—another signal that defence spending is turning into big procurement for local supply chains. Ukraine Drone Deals: Ukraine signed new drone cooperation pacts with Estonia, the Netherlands and Denmark, expanding joint production and tech exchange based on battlefield-proven designs. Election Cost Pressure in Latvia: Latvian parties’ 15th Saeima election platforms are packed with long-term spending and tax promises, but many lack clear funding plans as Latvia’s deficit and rising NATO-linked defence spending squeeze room for new commitments.

Defence Industry & Procurement: Canada pledged nearly $1B for Ukraine on July 7 at the NATO summit in Ankara—$475M for ammunition, $400M for 35 Canadian-made armoured vehicles, plus $50M for critical technology and engineering equipment—while also pushing air-defence support and NATO procurement via PURL. Regional Defence Finance: Latvia joined Albania, Belgium, Greece, Luxembourg, Romania, Türkiye and Ukraine in backing Canada’s Defence, Security and Resilience Bank, aimed at low-cost financing to scale defence industrial capacity, with operations targeted for 2027. Baltic Drone Production: Ukraine and Estonia signed a drone cooperation deal to enable Estonian companies to produce drones using Ukrainian wartime know-how; Latvia already signed a similar drone agreement in June. NATO Air Surveillance Upgrade: NATO selected Saab’s GlobalEye for negotiations to replace part of the ageing Boeing E-3 AWACS fleet, with Latvia among the 11 participating nations. EU Air Defence Purchases: Nine EU countries, including Latvia, urged the European Commission to quickly approve buying US-made air defence missiles for Ukraine using the €90B 2026–2027 package. Infrastructure Quality Watch: Latvia’s State Roads carried out unannounced checks and found non-conformities in mineral and asphalt samples at road repair sites, requiring contractor corrections.

NATO Procurement: Eleven NATO countries, including Latvia, announced joint procurement of Saab GlobalEye aircraft to replace part of the aging Boeing E-3 AWACS fleet, boosting air, land and maritime surveillance against drones, ballistic and cruise threats. Latvian Industry Watch: Latvia’s industrial production rose 6.2% year-on-year in May, with manufacturing up 6.1% and electricity & gas up 10.5%, while mining and quarrying grew 2.5%. Energy Supply Chain: Ukraine says European partners have inspected eight decommissioned thermal plants across Europe and that 199 shipments of equipment (3,300+ tons) are already operating at Ukrainian energy sites; Ukraine also expects Riga CHP-2 equipment. Construction Oversight: Police investigated a partial collapse at an unfinished building on Anniņmuižas Street in Rīga; no injuries were reported, and the Ministry of Economics says owners and construction managers must take more responsibility. Public Transport Crunch: Riga-area bus routes were hit by cancelled trips after a driver shortage, with 31 cancellations on July 6 and 101 since Friday. Security & Industry Links: Four Latvian citizens are accused of spying for Russia via “Baltic Antifascists,” including alleged collection of logistics and airport-related information. Defence Spending Pressure: Ahead of the Ankara summit, the US urged allies to move toward the 5% GDP defence target sooner, highlighting the Baltic states as leaders.

Industrial Pulse: Latvia’s industrial production rose 6.2% year-on-year in May, with manufacturing up 6.1% and electricity & gas up 10.5%, while monthly output climbed 0.4%. Producer Prices: Eurostat data show Latvia’s producer prices up 1.4% month-on-month in May, amid higher costs across much of the EU. Energy Hardware for Ukraine: Ukrainian and European partners inspected eight decommissioned thermal plants to relocate equipment to Ukraine; Latvia is part of the effort to move assets from Riga TPP-2. Defence Deals & Drones: Ukraine is pushing “drone deals” with at least seven NATO states by year-end, with Latvia already among the partners. Forestry Finance: Luminor Bank approved €3m for forestry firm Timbro, lifting its credit line to €5m to expand logging and timber trading. Local Transport Strain: Riga-area bus cancellations hit 100+ trips as a driver shortage leaves “Latvijas Sabiedriskais autobuss” short by 100+ drivers. Security & Espionage: Latvia accuses four citizens of spying for Russia via pro-Kremlin “Baltic Antifascists,” including targeting transport and airport logistics. NATO Burden-Sharing: The US urged allies to move toward 5% of GDP on defence ahead of the Ankara summit, highlighting Latvia among the “leading” spenders. EU Spyware Pressure: Civil society and MEPs demand urgent EU Commission action after a PEGA investigator was reportedly hacked with Pegasus.

Baltic Power Grid: Estonia and Latvia unveiled the preferred route for a new Estonia–Latvia electricity cable, running from Paide to Saaremaa and onward to Latvia via subsea and underground/overhead segments, aiming to boost grid performance and renewable exports. Regional Security: NATO’s eastern flank is hardening for a “first days alone” scenario, with Latvia, Estonia and Lithuania building a joint Baltic defense line of anti-tank ditches, minefields, bunkers, drones and sensors. Supply Resilience: Latvia and Estonia opened a “Stronger Together” business forum and signed an MoU to cooperate on supply security and strategic state reserves, focused on crisis coordination and critical resources. Ukraine Drone Diplomacy: Ukraine is pushing “drone deals” with NATO states including Latvia and Lithuania, framing them as broader systems know-how and components access. Energy-Defense Tension: Russia’s deputy foreign minister warned Latvia that NATO membership won’t shield it from retaliation tied to facilitating drone strikes. Food Safety Watch: A multi-country salmonella outbreak linked to flavoured instant noodles has reached Latvia among other countries, renewing pressure on traceability and enforcement.