The Baltic Course
Tourism

INVESTMENT

Privatization

Summary

Projects Show

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

Ingus Berzins

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.

Name of the project Investment cost million Field
Cellulose Plant 900 Industry
Cellulose Plant 800 Industry
Business city Siaure 525 Real estate, its development
Port of Ventspils 524 Logistics, infrastructure
State Information megasystem 420 Telecommunications & IT
Western pipeline system 260 Logistics, infrastructure
Baltic Gas Circle 258 Energy
Transmission line 330-110 kW 185 Energy
Polish-Lithuanian joint energy system 161 Energy
Modernization of HPP 145 Energy
The Riga North Tunnel 150 Logistics, infrastructure
Riga Thermal Supply 130 Energy
Plywood Plants 100 and 55 Industry
Railway 80/6.5/60 Logistics, infrastructure
Annular Road (Vilnius) 89 Logistics, infrastructure
New Town Riga 78 Real estate development
Skrunda-1 town 75 Real estate development
Business Centre PK Investment 65 Real estate development
Cascade of HPP on Daugava river 64 Energy
Noord Natie (Ventspils) 60 Logistics, infrastructure
Kolizejs, Trade & Recreation Centre 50 Real estate development
Lodging, recreation (Saliena city) 50 Real estate development
Port of Klaipeda 44 Logistics, infrastructure
Riga Airlines 4/40 Logistics, infrastructure
Privatization of the Saving Bank 42 Finance
Modernization of Achema 38 Industry
Terminal for friable cargoes at the Ventspils Port 29 Logistics, infrastructure
Baltijos Keramika 29 Industry
Lietuvos Aviolinijas 26 Logistics, infrastructure
Quay (Klaipeda) 10/13,5 Transport, infrastructure
Water Supply (Ventspils) 22 Real estate development
Production of Paper Napkins 20 Industry
Terminal for liquid cargoes (Ventspils) 18 Logistics, infrastructure
Water Supply (Jurmala) 15 Real estate development
Klaipeda Free Economic Zone 14 Real estate development
Kaunas HPP 14 Energy
Living District (Klaipeda) 13 Real estate development
Airport (Ventspils) 13 Logistics, infrastructure
Bridge in Ventspils 11 Real estate development
Technological parks Nordic Industries 11 Real estate development
Airport (Liepaja) 10 Logistics, infrastructure
Pirma komercbanka, inv. fund 5-10 Finance
Riga Trade Port, Andrejosta 9 Logistics, infrastructure
Aleksotas (Kaunas) 9 Industry
Liepaja Fishing Port 8 Logistics, infrastructure
Sport Centre in Sloka 7 Real estate development
Riga Port, Passengers Terminal 6 Logistics, infrastructure
Processing of hard waste (Ventspils) 6 Real estate development
Golf Complex (Trakai) 6 Tourism
Airport (Daugavpils) 5 Logistics, infrastructure
Baltijos Automobiliu Technika 5 Industry
Business centre (Riga Airport) 3 Logistics, infrastructure
The Baltic Industry Park in the Port of Ventspils 2.6 Real estate development
Logistics Centre Solo-L (Liepaja) 2 Logistics, infrastructure
Silutes Baldai 2 Industry
Privatization of Lietkabelis 2 Industry
Relaxation Centre in Mezaparks 2 Real estate development
Narrow-gauge Railway in the north   of Latvia & south of Estonia 0.5-2 Tourism
Cruise Ferry Terminal (Ventspils) 1.75 Logistics, infrastructure
Mazeikiu Elektrotechnika 1 Industry
Tourism Centre (Dundaga) 1 Tourism
Management System for Enterprise   for the Geo-thermal researches 0.45 Telecommunications & IT
There is no stated cost estimation for the 25 projects prepared for the Baltic Business Conference.
Switch to Internet in the countryside Telecommunications & IT  
Information Technologies Park Telecommunications & IT  
Lattelekom Centre for Russian-speaking countries Telecommunications & IT  
Terminal for general cargo & container cargoes (Liepaja) Logistics, port services  
Passenger Terminal (Liepaja) Logistics, port services  
Cargo Distribution Centre on the Latvian-Russian border Transport, logistics  
Gas Complex (Ventspils) Energy  
Combined Heat and Power station (Ventspils) Energy  
Design Centre CAD/CAM Industry  
Paper Plants Industry  
Business Park (Riga Airport) Real estate, its development  
Technological Park, Military Port (Liepaja) Real estate development  
Development of the Liepaja Free Economic Zone Real estate development  
International Centre of Financial Services (Riga) Finance  
Klaipeda Yacht Club Tourism  
Industry of Tourism, Klaipeda Tourism  
Industry of Tourism, Palanga Tourism  
Camping grounds in Ventspils Region Tourism  
Ventspils - capital of Tourism Tourism  
Relaxation Centre in Ventspils Tourism  

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.

Riga

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.