AGP Executive Report

Defense & Procurement: Latvia is moving toward acquiring Anduril’s Barracuda long-range cruise missiles, with President Edgars Rinkēvičs highlighting new U.S. defense-industry cooperation and MoUs during his visit. Counter-Drone Tech: Anduril and ORIGIN signed an MoU to assess integrating Anduril’s Lattice command-and-control with ORIGIN’s BLAZE interceptor drone, including joint testing and demonstrations in Latvia. Sanctions & Risk: Bloomberg reports Russian billionaires are studying how Alisher Usmanov and Mikhail Fridman navigated EU sanctions delisting, while Latvia has also imposed national sanctions following the EU compromise. Trade & Security: Latvia urgently introduced tighter border controls on third-country grain transit to block stolen Ukrainian grain moving via forged documents. Energy Costs: Latvia’s heating bills could rise 10–15% this winter, though fuel supplies are considered adequate. Aviation Finance: AirBaltic filed for Chapter 11 in the U.S., saying operations continue as it seeks new terms amid debt and rising costs. Regulation Watch: The European Commission opened infringement procedures over missed EU rules on industrial emissions, hydrogen/gas markets, AML, and consumer protection.

Border Controls on Grain: Latvia’s Saeima has urgently amended the Animal Feed Circulation Law to introduce mandatory border checks on third-country grain shipments, empowering the Food and Veterinary Service to inspect consignments and take lab samples to verify origin and block stolen Ukrainian grain. Fuel Tax Debate: Lithuania’s finance minister questioned Latvia’s temporary diesel and petrol excise cuts, arguing the measure is too costly to replicate, while Lithuania weighs alternatives like discounted public transport fares. Heating Bills Watch: Latvia’s Ministry of Climate and Energy warns heating costs could rise 10–15% in a mild-to-moderately cold winter, with local differences depending on fuel and purchase timing. Rail Baltica Timeline: Estonia, Latvia and Lithuania agreed to shift Rail Baltica’s main-line completion into the 2028–2034 EU budget period, pushing the Tallinn–Pärnu section to 2032. Riga Airport Expansion: Riga Airport is advancing a €98m terminal expansion to add capacity and modernise passenger processing, with works planned in stages over about 42 months. Defense Procurement: Latvia is moving to buy Anduril’s Barracuda long-range cruise missiles, while also signing cooperation memoranda with local drone maker Origin Robotics. Business & Tech: Digitex (Datlex group) is acquiring 90% of InfoStrategy, and Tet appointed a new executive director for its Helio Media subsidiary.

EU Sanctions & Baltic Fallout: Latvia is set to impose national sanctions on Russian oligarchs Alisher Usmanov and Mikhail Fridman after the EU delisted them in a compromise, while Estonia and Lithuania also moved to keep pressure at home. Defense & Procurement: Latvia’s defence ministry is exploring Israeli air-defense and drone countermeasures, including loitering systems and potentially Iron Dome, as Riga weighs a collective European air-defense approach. Energy Storage Investment: Taaleri Energia backed Estonia’s 192MW/420MWh Raudsepa battery project, targeting grid balancing and market revenues from 2027. Agribusiness Finance: Signet Bank provided EUR 4m to SIA Agro-Kaķenieki for farm development and efficiency upgrades. Mobility Tech: dots. and HOLON agreed to pursue EUR 30m EU-backed autonomous transport pilots and an autonomous vehicle manufacturing base in Latvia. EU Industrial Policy: Ministers debated Chips Act 2.0, focusing on reducing chip dependencies while keeping open trade with trusted partners. Business & Trade: Fruit Attraction 2026 expects 121,000 trade visitors and highlights Latvia’s participation.

Banking & Agriculture: Signet Bank approved EUR 4m financing for SIA Agro-Kaķenieki to modernise dairy and crop operations in Zemgale, supporting exports and efficiency. Mobility & Tech Investment: dots. and HOLON agreed to pursue up to EUR 30m in EU-backed funding for autonomous transport in the Baltics, including an autonomous vehicle manufacturing facility in Latvia and pilot passenger routes. Energy Markets: A Clean Horizon analysis says battery storage revenues rose in Spain in August, while the Baltics lagged elsewhere—highlighting how market design and ancillary services shape profitability. Hospitality & Tourism Demand: After a EUR 4m renovation, Pullman Riga Old Town is positioning itself for stronger winter conference business and a higher share of Riga’s five-star market. Defence Procurement: Latvia selected the Czech Morana 155mm wheeled howitzer over Sweden’s Archer, citing lower cost, faster delivery and Latvian industrial participation. Sanctions & Politics: Estonia and Lithuania moved to impose national sanctions on Usmanov and Fridman after the EU delisted them, while Latvia’s stance remains a key part of the bloc’s fallout. airBaltic Restructuring: The airline’s Chapter 11 filing puts funded debt at EUR 503.3m and operating lease liabilities at EUR 855.6m, with plans to reduce fleet size. Cyber & Security: Latvia arrested a suspected hacker tied to breaches at at least two companies, as regional defence and drone concerns keep rising.

EU Sanctions Standoff: The EU extended Russia-linked sanctions for 36 months, but removed billionaire Alisher Usmanov and Mikhail Fridman from the list—sparking backlash from Ukraine and anger across Europe, with Latvia saying it was forced into a “difficult” compromise and initially opposing the delistings. Latvia’s National Response: Latvia moved to impose its own sanctions on Usmanov and Fridman after the EU decision, while the Latvian PM said the country was left “standing alone” in the negotiations. Baltic Drone Defense Push: Estonia, Latvia and Lithuania secretly asked the European Commission for €500m to boost drone-fighting capabilities, citing fears of Russian drone strikes testing NATO’s resolve. AI Governance: Czech President Petr Pavel urged AI to develop under international rules, warning that governance must keep up before risks grow. Energy Security for Winter: Ukraine warned Canada to help keep the lights on as Russia targets energy infrastructure ahead of winter, while Finland and Ukraine signed a drone-defense cooperation deal. Cybercrime in Latvia: Latvian police arrested a 23-year-old suspect over hacking at least two companies, including an LMT electronics repair breach, allegedly stealing personal data and attempting extortion.

EU Sanctions Pressure: EU economy commissioner Valdis Dombrovskis urged member states to fight “sanctions fatigue” after the bloc extended Russia-linked personal sanctions for three years but delisted Alisher Usmanov and Mikhail Fridman, a move Latvia initially blocked before lifting its veto under pressure. Latvia’s Position: Prime Minister Andris Kulbergs said Latvia was left “standing alone” in the Baltic stance and warned the compromise could weaken EU unity. Ukraine Pushback: Ukraine called the delistings “shameful and unjustifiable,” warning Russia may exploit EU divisions. National Security & Business Risk: Latvia arrested a 23-year-old hacker suspected of cyberattacks and extortion against at least two companies, including LMT group repair firm TSC. Defense Supply Chain: Latvia extradited suspects in the Milrem Robotics arson case to Estonia; the firm supplies weapons to Ukraine. Trade & Growth: A Latvian business mission kicked off in the US (New York, Los Angeles, San Diego) with meetings across defense/dual-use, biotech and start-ups. Digital Economy: Riga will host Techritory 2026 on digital sovereignty, security and connectivity in October.

EU Sanctions Shake-Up: The EU agreed to extend Russia-related sanctions for three years but remove billionaire Alisher Usmanov and Mikhail Fridman from the list, after tense talks where Latvia ultimately abstained to avoid the whole package expiring. Latvia Pushes Back Nationally: Latvia has ordered its foreign ministry to draft national sanctions against both men to keep their assets frozen locally, even as it accepted the EU compromise. Ukraine Funding & Security: Zelenskiy met EU Commission chief von der Leyen at UNGA, thanking Brussels for a €90bn loan and warning that delisting oligarchs is “self-defeating” while Russia keeps striking. Baltic Security Signals: NATO’s deputy commander in Europe said Putin is becoming “increasingly cavalier,” with sabotage and drone/missile risks rising. Riga Business Links: Latvian entrepreneurs visited Paramount and Disney in the US as part of a LIAA trade mission. Local Defense Case: Latvia handed over three suspects to Estonia over an arson case at Milrem Robotics’ Tallinn site.

EU Sanctions Standoff: Latvia has opposed a Brussels compromise to lift EU travel bans and asset freezes on Russian-linked oligarchs Alisher Usmanov and Mikhail Fridman, warning sanctions must be strengthened, not weakened, as the bloc scrambles for unanimous approval before the deadline. Baltic Security & Mobility: Riga hosted “Mobility in Europe 2030,” pushing a “Military Schengen” model for faster cross-border movement of troops and equipment, while European intelligence officials warn Russia could test NATO “months, not years.” Tech & Finance Deal: Datlex group company SIA Digitex is buying a 90% stake in SIA InfoStrategy to expand business intelligence and data analytics capacity across the Baltics. Aviation & Infrastructure: Riga Airport kicked off the next phase of RIX Airport City, launching a competitive dialogue for a hotel and office complex by 2030. Defense Industry: Three Latvian suspects in an arson case involving Milrem Robotics were extradited to Estonia and remanded. Real Estate Inflows: Estonian developers are increasingly targeting Riga as land is cheaper and planning approvals move faster.

EU Sanctions Deadlock: EU ambassadors failed to finalize a deal extending Russia-linked sanctions, with Latvia reportedly lodging a last-gasp objection over a compromise to lift bans on oligarchs Alisher Usmanov and Mikhail Fridman while renewing measures for nearly 3,000 others; talks are set to resume hours before the Sept. 22 expiry, as Kaja Kallas urges a swift rollover and hints at a new sanctions package. Latvia Defence Procurement: Latvia’s Cabinet chose Excalibur Army’s Morana 155mm wheeled artillery over BAE Systems’ Archer, citing better pricing, faster delivery and stronger involvement of local defence industry. Latvia Macro Outlook: The IMF says Latvia’s growth rebounded in 2025 but expects a slowdown in 2026 to 1.8%, with inflation pressures tied to energy costs and geopolitical risks. Riga Infrastructure: Riga plans a temporary bridge during Vanšu Bridge repairs, with the city weighing leasing costs up to €20m versus buying a prefabricated bridge for state use. Business & Innovation: Bitė Group created a new digitalization division led by CDO Gytis Breikštas, aiming to shift up to half of key customer operations online within 2–3 years. Start-up Push in Latgale: Rēzekne will host the StartUP Festival on Oct. 9 to connect founders, investors and universities across Latgale and beyond.

Start-up Ecosystem: Rēzekne will host Latvia’s StartUP Festival on 9 October, bringing founders, investors and universities from Latgale and beyond, with sessions on early funding, AI for business building and investor criteria. Telecom & Space: LMT Group and Novaspace signed an agreement at ESA’s ESTEC to develop a Latvia telecommunications innovation platform tied to 5G/6G satellite networks, aiming to grow a space-tech ecosystem. EU Red Tape Push: Thirteen EU member states, including Latvia, backed an “EU legislative deep-cleaning” idea to review whether existing rules still make sense and cut unnecessary burdens. Banking Snapshot: Latvia’s banking sector posted €205.3m profit in H1 2026 (down 2.9% y/y), while loans to non-banks rose to €19.47bn. Public Finance Outlook: The IMF warns Latvia faces slowing growth, inflation pressures and rising fiscal strain, urging a credible medium-term fiscal plan and faster reforms. Defence Procurement: Latvia selected Excalibur Army’s Morana 155mm wheeled howitzer over Sweden’s Archer, citing price, delivery terms and Latvian industrial participation. Renewables Watch: EU renewable generation hit 54.1% of net electricity in Q2 2026, with Latvia among the highest at 97.7%. Airline Moves: Ryanair plans a 6% winter capacity increase in Riga (40,000 more seats) while cutting in Estonia and Lithuania.

Latvia-Germany Business: A LIAA-led trade mission in Berlin brought together 54 Latvian firms and partners, targeting investment in energy, defence technologies, autonomous mobility and space; Latvia’s economy ministry says prior work already produced concrete projects worth over EUR 600m. Life Sciences Push: Another LIAA delegation met German medical tech and biotech players in Berlin to expand cooperation in pharmaceuticals, medical technologies, digital health and clinical research, with Latvia pointing to EUR 44.3m in pharma exports to Germany in 2025. Defence Industry Links: Latvia’s defence and dual-use companies also showcased supply opportunities to German industry and the defence ministry, aiming to plug into German and European supply chains for unmanned systems and components. Security & Air Defence Warning: Latvia’s president Edgars Rinkēvičs says Europe and NATO are falling behind in drone and aerial warfare; he warns many allies may struggle to cope with a Russian missile strike and that preparations could become outdated within months. NATO Missile Supply: The US says it’s working with allies to find available Patriot missiles for Ukraine and to expand manufacturing capacity in the US and Europe. airBaltic/Travel Cost Pressure: Global airline bankruptcies are linked to fuel prices up sharply, with Latvia’s airBaltic cited among carriers under strain.

Latvia–Germany Business: Latvia’s LIAA trade mission in Berlin brought life sciences and digital health firms to meet German medical tech and biotech players, aiming for joint product development, clinical research and deeper access to the German market. Latvia–Germany Defence Industry: A parallel LIAA mission focused on defence and dual-use tech, with Latvian companies pitching unmanned systems, military vehicles and electronics to German industry and the Federal Ministry of Defence, targeting supply-chain roles and co-production. Security & Procurement Risk: Latvia’s President Edgars Rinkēvičs warns Europe is falling behind Ukraine’s “lightning speed” drone and aerial warfare, saying many NATO states may struggle to repel a missile attack if conflict expands—while Patriot and interceptor shortages keep pressure on timelines. EU Border Tech Friction: The EU allowed several Schengen countries to pause full rollout of the entry-exit system (EES), after queues and missed flights sparked criticism from airlines including Ryanair. Aviation Cost Crunch: Global airline bankruptcies are spreading as fuel prices stay about 70% higher year-on-year, with restructuring pressures reaching carriers including AirBaltic. Food & Trade Markets: Euronext wheat tracked Chicago lower amid Black Sea uncertainty, while Baltic ports—including Latvia—continued to see Russian wheat offers. Latvia in Focus Abroad: Latvia banned Russian NHL star Alexander Ovechkin from entry, alongside other Russia-linked figures.

Latvia’s Defence Readiness: President Edgars Rinkēvičs warns Europe and NATO are falling behind in drone and aerial warfare after Ukraine, saying air defence and missile interception gaps mean many allies couldn’t repel a Russian missile strike if the conflict widens. EU Border Tech: Nine Schengen countries, including several major EU states, can pause full EES rollout into 2027 as facial and fingerprint systems still cause long queues and travel disruption. Aviation Cost Shock: Global airlines face a wave of bankruptcies as fuel prices surge about 70% year-on-year to roughly $181 per barrel, hitting smaller carriers hardest. Latvian Defence Industry: A Latvia–Germany trade mission in Berlin brought defence and dual-use firms to discuss joining German supply chains and joint technology development, with Latvia pointing to rising exports to Germany. Sanctions & Entry Bans: Latvia added Russian NHL star Alexander Ovechkin and boxing official Umar Kremlev to its entry blacklist, linking the move to pro-Putin political activity and Kremlin ties. Ukraine War Diplomacy: US-led talks involving Steve Witkoff and Jared Kushner are reviving negotiation talk, but territory disputes remain the core obstacle. Grain Markets: EU wheat tracks Chicago lower as Black Sea export uncertainty persists, while Baltic ports—including Latvia—remain part of the Russian wheat supply picture. EES & Travel: Ryanair again criticises EES as a “shambles,” pushing for further derogations as passengers face delays. Sports/Identity: Noahkai Banks’ switch to Germany for U-21 qualifiers also puts a spotlight on how dual-national athletes choose national teams.

Drone & Air-Defence Readiness: Latvia’s President Edgars Rinkēvičs warns Europe and NATO are falling behind Ukraine’s “lightning speed” drone and aerial warfare, saying many allies may struggle to intercept a Russian missile strike if escalation occurs—while Patriot and other interceptor supplies remain bottlenecked. Latvia–Germany Defence Trade: A LIAA-led delegation met German defence firms and ministry representatives in Berlin to deepen supply-chain links for unmanned systems, components and dual-use tech, citing rising Latvian exports to Germany. Crypto Regulation Shock: A report says ECB chief Christine Lagarde personally blocked Binance’s EU licence after Greece’s regulator had nearly cleared it, highlighting political friction in the bloc’s crypto rules. Latvia Entry Bans: Latvia banned Russian NHL star Alexander Ovechkin and Kremlin-linked boxing figure Umar Kremlev from entering the country amid pro-Putin controversy. Aviation & Restructuring Watch: UAE flight recovery remains uneven, with some carriers resuming later and others still suspending routes—an indirect reminder of how fuel and security risks keep reshaping regional travel. Canada Joins JEF Talks: Canada has formally applied to join the UK-led Joint Expeditionary Force, aiming to diversify defence ties across the North Atlantic and Arctic.

Latvia’s Security Readiness: President Edgars Rinkēvičs warned Europe is lagging behind Ukraine’s fast-moving drone and aerial warfare, saying many NATO states would struggle to repel a missile attack if the conflict spreads. Defense Procurement: Latvia approved buying Czech Morana 155mm wheeled howitzers instead of Sweden’s Archer, citing lower cost, faster delivery, and stronger local defense-industry involvement. Sanctions & Entry Bans: Canada’s Liberals faced calls to sanction Washington Capitals star Alex Ovechkin over a Putin-aligned ad, while Latvia also placed Ovechkin (and boxing figure Umar Kremlev) on its entry blacklist. Regional Military Cooperation: Canada formally applied to join the UK-led Joint Expeditionary Force, adding another Arctic/North Atlantic NATO member as Ottawa seeks more European security ties. Aviation & Restructuring Watch: airBaltic’s Chapter 11 process continued to draw attention as it secures court approval and financing amid jet-fuel pressure. Energy & Investment: EU CEF Energy grants backed cross-border renewables, including a Latvia-Lithuania onshore wind stage, while Luminor provided leasing and loans to Latvian firms expanding fleets and equipment. Latvian Business Abroad: Latvian fintech companies pitched German institutional investors in Berlin, aiming to scale in Europe’s largest economy.

Defence Procurement: Latvia has approved buying Czech Morana 155mm wheeled self-propelled howitzers, replacing the earlier plan to procure Sweden’s Archer, citing better cost, delivery timelines and stronger local defence-industry involvement. Aviation Restructuring Watch: airBaltic’s Chapter 11 push continues to shape regional travel and creditor talks, while AirAsia’s Tony Fernandes says the airline has “strong liquidity” to handle jet-fuel shocks tied to the Iran war. Banking & Payments: Latvijas Banka has issued a licence to Velvian SIA to operate as a payment institution, enabling card-payment acceptance for merchants and business clients. Fintech Investor Push: Latvian fintech firms pitched solutions to German institutional investors and family offices in Berlin via an LIAA-led trade mission. EU Energy Funding: the European Commission approved €125.8m in CEF Energy grants for cross-border renewables, including €44.4m for a Latvia-linked wind project stage. Governance & Compliance: KNAB will investigate whether ZZS distributed alcohol-related “souvenirs” to seniors during the pre-election period, raising political financing rules questions. Mobility Policy: an EESC forum in Riga urged faster progress on sustainable and resilient mobility, including military mobility needs.