Translated using ChatGPT service.
At the January 7 Cabinet of Ministers meeting, a new EU-funded support program was approved to provide small and medium-sized enterprises (SMEs) in Latvia with state loans for creating innovative products and enhancing productivity.
"Innovation is a critical factor for the competitiveness of Latvia's economy. This new support program, with a budget of €98.4 million, offers businesses the opportunity to invest in research, development, and the creation of new products. These initiatives will drive the growth of high-tech industries, create new jobs, and increase export volumes. We expect that by 2029, at least 40 new products and 240 well-paid jobs will be created, contributing to economic growth and strengthening Latvia's competitiveness in the global market. I encourage entrepreneurs to take advantage of this opportunity and become part of the innovation development process," emphasized Economics Minister Viktors Valainis.
The program aims to support the development of innovative products, including dual-use products, by stimulating private sector investments in research, development, and innovation. This includes support for the construction of new production facilities, equipment acquisition, the establishment of production connections, and the creation of new jobs in smart specialization strategy (RIS3) areas.
The total funding for the support program is €98.4 million, comprising €83.6 million from the European Regional Development Fund (ERDF) and €14.8 million from the state budget.
State support for developing innovative and dual-use products will be available to businesses through a combined financial instrument: Altum loan with a capital discount or parallel loan with a capital discount. The loan amount for one business will range from €300,000 to €5 million, with a maximum capital discount of 30%, capped at €1.5 million. Before submitting a project application, businesses must obtain an opinion from the Latvian Council of Science or the Ministry of Defense confirming that the product meets the definition of an innovative or dual-use product.
For research and development (R&D) activities, SMEs can access Altum loans ranging from €300,000 to €1 million, though capital discounts will not be applied in this case.
Within three years, businesses must invest at least €250,000 annually in R&D, achieve a revenue increase of at least twice the investment project amount, increase annual export volumes by at least 20% compared to the year of project completion, and create at least one new job for every €250,000 in available capital discounts. Each new job must be maintained for at least two years, with an average monthly gross salary of at least 1.6 times the national average in the previous year.
It is planned that, within the framework of the support program, by the end of 2029, support will be provided to 40 businesses, 40 new products will be developed, and in addition to state and EU fund investments in innovation development, at least €71.4 million in private investments will be attracted. Annual R&D investments will reach at least €8 million, and export growth will start at a minimum of €100 million annually beginning in 2026. It is also planned that at least 240 new, above-average-paid jobs will be created in the regions, with labor tax revenues to the state budget increasing by €5 million annually.