While awaiting the 9th Annual Meeting of the European Bank for Reconstruction and Development, General Secretary Antonio Maria Costa announced that the City of Riga will be a mini Davos in May 2000. Perhaps that kind of flattery can be said about any corresponding eastern European city, but the Baltic States have vigorously prepared for the EBRD meeting. Latvian and Lithuanian state institutions and private enterprises have prepared 82 projects in need of investments to be shown to potential sponsors
The financial elite, who possess an extremely high level of expertise not yet seen in the Baltics, will participate in the Annual Meeting of the European Bank for Reconstruction and Development and its accompanying Baltic Business Conference. A wish of all Baltic «idea generators» is to come and demonstrate their projects in hope of exciting the curiosity of a large-scale investor.
It is hard to remember a case where an important business project would be initiated at a business seminar or conference in the Baltics. The biggest investment projects were realized either with the assistance of the privatization process or through international tenders, such as in the case of Lattelekom and Eesti Telekom. After the collapse of the Soviet regime, newly restituted owners who had lived abroad for years also often brought potential western partners.
To what extend can these 82 projects hope to find financial support at the Business Conference? There is no definite answer. There are projects that have a long-term history and also completely new ones that are not the least interesting.
A construction project for a Lithuanian-Polish transmission network worth ¤ 161 million is one of the many projects to be presented. Several tenders have been evaluated regarding this project, and companies such as CallEnergy and Siemens have shown an interest. The Lithuanian side believes that projects of this type, which envisages the connection of the power transmission networks of the Central European countries and the former Soviet Union, need to be supported by the European Union. Obviously at this point, including this project in the conference is meant to increase popularity for the project.
Another project, proposed by the real-estate company Latio, is to construct a trade and recreation centre Kolizejs on the territory of the Riga Central Station. This project is worth ¤ 50 million, and is news even for the local specialists.
BC has distributed the proposals and their estimated cost in ¤. The following table gives a clear picture of the areas to be developed in the Baltic economy.
One should pay attention to some interesting details while studying the tables. Latvia is oriented towards investment in the field of transport, offering 18 projects, Lithuania offers only 5. But then, Lithuanians more often than Latvians are looking for investment in energy and industry. The list shows, which is not new, that Lithuania is oriented towards industry; by comparison Latvia focuses on transit services from/to Europe to/from Russia. Both countries are interested in real estate development, right up to the creation of a business centre.
Worth mentioning is the fact that both Latvia and Lithuania are ready to present their projects on the establishment of a Cellulose Plant. These are huge and the most expensive investment projects: ¤ 900 million for Latvia and ¤ 800 million for Lithuania. Latvian specialists foresee that only one plant of this type with the necessary infrastructure may result in 3% growth in GDP for Latvia.
Unfortunately, the number of projects without stated costs makes it difficult to understand what field is more in need of investments. Looking at the investment figures available the overall picture is as follows: Telecommunications & IT - ¤ 420,45 million; transport, logistics and infrastructure - ¤ 1,468 billion; energy - ¤ 957 million; industry - ¤ 1,961 billion; real estate - ¤ 949 million; finance - ¤ 5-10 million; tourism- ¤ 9 million.
Maris Elerts, General Director of the Latvian Development Agency
- What criteria have been followed when selecting the projects to be presented at the Meeting?
- Several conditions had to be followed; i.e. every project had to have not only a page of description, but also a real business plan. Also the project had to be large enough to attract serious investment structures. Many projects listed were presented by the state investment programme or prepared by local governments.
Vitas Groudis, General Director of the Lithuanian Development Agency
- In your opinion, how many projects will succeed in finding investment following such a presentation?
- The meeting in May of the European Bank for Reconstruction and Development is really our hope. We think that the EBRD itself will become one of those interested in participating in the projects proposed by the Lithuanian entrepreneurs and the state organizations.
Agu Remmelg, General Director of the Estonian Development Agency
- Why are there no projects for investments proposed by Estonia for the Meeting?
- The Meeting organizers suggested presenting several types of projects for investment, for example companies ready for privatization or the creation of new infrastructure objects. The problem is that all the companies in Estonia are already privatized, and the government itself takes care of infrastructure issues. Consequently, we can talk about the general activities in the country and possible specific projects in the «green field» area.