Baltics Business Opportunity Survey Is Published for General Information Purposes Only and Does Not Constitute Advice of Any Kind

Baltics Business

Opportunity Survey

Estonia Latvia Lithuania

January 2019

The Klauberg Legal Baltics Business Opportunity Survey is published for general information purposes only and does not constitute advice of any kind. The publisher is not liable for any errors or misrepresentations.

1 © Klauberg Legal 2019

Dear Reader, The Klauberg Legal Baltics Business Opportunity Survey provides information about upcoming investment projects in the Baltic States. With offices in Estonia, Latvia, Lithuania, Klauberg Legal covers this region in all relevant areas of business law, including corporate/M&A, commercial and contract law, litigation and arbitration, tax and administrative/procurement. For further information on the projects presented, please contact our local offices. This publication is for information only; bnt does not represent the project initiators.

General contact:

Lithuania: Sigita Sriubaite [email protected] Latvia: Ilze Straume [email protected] Estonia: Max Wood [email protected]

Contents:

News on Rail Baltica ...... 5 Estonia ...... 6 Four Estonian companies worth investing in ...... 7 New garden centre in Tallinn’s Tähesaju City ...... 8 Ülemiste City quarter in Tallinn is rapidly developing ...... 9 Petroleum tower in Muuga Harbour for sale ...... 10 New large scale project at Muuga Harbour ...... 11 Development of Kopli Liinid in Tallinn finally begins ...... 12 Construction of Reidi Road in Tallinn under way ...... 13 New office building in Tallinn Freedom Square ...... 14 VizKey™ investigation software to become global ...... 15 Fahle Park – living and doing business with style ...... 16 Bridge to Saaremaa: financing to come from private investors ...... 17 A Private Island for Sale ...... 18

2 “Gate Tallinn” Retail Park Development in Tallinn, Estonia ...... 19 Tunnel from Tallinn to Helsinki- Update ...... 20 Latvia ...... 21 New Baltic Sea shipping line between Skulte and central Sweden ...... 22 Major changes to one of Riga’s most famous sights: TV tower renovation ...... 23 Improvement of energy efficiency in public buildings ...... 23 Improvement of energy efficiency in public buildings ...... 24 Restoration and preservation of natural heritage of Northern Courland ...... 25 Financing needed for start-up: supplier to furniture manufacturers ...... 26 New industrial hub planned on the old Liepajas Metalurgs site ...... 27 Business incubators will receive EUR 32.8 million ...... 28 Planning of bypass road for A7 highway ...... 29 Electrification of railway network ...... 30 Construction of logistics center ...... 31 Planning and development of multimodal transport hub ...... 32 Lithuania ...... 33 Plans for nonsubsidized wind Energy Park revealed ...... 34 Maxima Grupė is looking for investors ...... 35 „Continental“ coming to Lithuania ...... 36 Globally active furniture producer is planning major investment ...... 37 Modernization of detention facilities ...... 38 Privatization of “Baltija” rest house in Palanga ...... 39 Police Infrastructure PPP projects in Kaunas and Panevezys ...... 40 Modernization of Lithuanian Zoo in Kaunas ...... 41 “Lithuanian Airports” seek investors ...... 42 Major upgrade of Klaipeda seaport ...... 43 The repair and maintenance of 3.500 kilometers railway ...... 44 Railway electrification ...... 44 National Stadium project in Vilnius ...... 44

3 Modernization of the highway in Kaunas ...... 44

News on Rail Baltica

Currently, RB RAIL AS holds only one open competition for “Technical study and design proposals for Rail Baltica Infrastructure Maintenance Facilities” (with the procurement identification no. RBR 2018/25). Interested suppliers shall submit their proposals electronically via the tools offered through the E-Tenders system until 20 November 2018.

More information about recent procurements can be found on http://www.railbaltica.org/tenders/.

Also, despite recent resignation of Latvian chief executive, Baiba Rubesa, there is no impact on the continuity of the company's activities due to the fact that Ignas Degutis has been appointed as acting CEO by the supervisory board. He joined RB Rail AS as Chief Financial Officer and was appointed as a member of the Management Board in April 2017.

Estonia Eesti

Klauberg baltics Tallinn office Estonia pst 9, EE-10143 Tallinn Phone + 372 6 86 31 67

[email protected]

Contact Person: Max Wood Phone: +372 5 661 15 71 [email protected]

Foto on visualhunt.com Four Estonian companies worth investing in

The Mergermarket portal for M&A transactions has published a list of Baltic companies that have potential for new transactions both now and in the future. From Estonia, four companies are listed.

FoodDocs OÜ provides a digital food safety service by helping food handlers to manage food safety

documents by ensuring that food safety documents comply with the law and that all necessary requirements are always met. According to Katrin Liivat, co-founder of the company, FoodDocs OÜ is expecting funding of around EUR 1 million next year.

Messente Communication OÜ is a global provider of messaging and user verification services with headquarters in Tartu, Estonia. Although the company is currently not actively looking for external funding, CEO Lauri Kinkar will not rule out its sale in the future. The most useful and sustainable solution for Messente would be a strategic partner-client who wants to connect Messente technology to its platform.

Nicorex Baltic OÜ, the largest e-cigarette sales company in Estonia, is considering potential acquisitions in order to support its growth in the Baltic market. Nicorex Baltic OÜ (turnover ca 2.2 million euros) together with the Veipland retail chain, recently bought Elgery Group OÜ, a competitor store with

its SKYsmoke product brand, e-store and store chain.

StandByMate is a recruiting platform established in 2017 that brings together jobseekers and employers by finding available seafarers near a vessel and sending personalized sea job offers to suitable candidates. According to Merit Valdsalu, co-founder of StandByMate, the company is looking for funding ca. 250,000 to 500,000 euros.

Foto: EFTEN New garden centre in Tallinn’s Tähesaju City

Object: Garden Baltic commercial real estate fund manager EfTEN is building a new garden Center in Tähesaju centre in Tähesaju City in the Lasnamäe district of Tallinn. The tenant of the City, Tallinn new garden centre will be Hortes AS and the new centre is already the second

garden centre for Hortes AS in Tallinn. Developer: EFTEN Real Estate EFTEN will invest more than 5.5 million euros in the construction of the Fund III garden centre and the main contractor for the project is Mitt & Perlebach OÜ. According to the current plan the garden centre will open on the 1st of May Estimated cost : 2019. ca 5.5 million euros Hortes AS is one of the three largest horticultural companies in Estonia and is Completion owned and operated by Baltic private equity firm Livonia Partners. Clients of expected: spring the new garden centre will be residents of Lasnamäe in particular as well as 2019 those living in nearby areas such as Pirita and Viimsi.

Foto: Ülemiste City Ülemiste City quarter in Tallinn is rapidly developing

The developer of Ülemiste City opened a new chapter in the development of the Ülemiste quarter by signing an agreement with contruction company „Fund Ehitus“ on a 12-million-euro deal to start construction of the first apartment building in

Object: Ülemiste Ülemiste City, in addition to new office space.

City The 13-storey 82-apartment building, called Lurich House and the 8-storey office

tower will be built between the 19th century limestone walls of the former Dvigatel Developer: wagon-building-factory. Apartments in Ülemiste City are intended primarily for Mainor Ülemiste people who have arrived to work in Ülemiste City from abroad, as well as for specialists AS & Technopolis from other Estonian towns and cities. Today, approximately 15 percent of the 10,000 Ülemiste AS people working in the township are from abroad. The planned completion time for the

buildings is the first half of 2020, after which the modern quarter will get its first Estimated cost: inhabitants and will be full of life 24 hours a day. ca 12 million euros

The new building complex is designed by the Architectural Bureau „Pluss“ and

Completion construction is funded by OP Corporate Bank. expected: 1. half Mainor Ülemiste's main business is to develop Ülemiste City as the largest business of 2020 hub in the Baltic region, located next to Tallinn Airport, on the site of the former

Dvigatel plant. Today, a 36-hectare area of Ülemiste City has office space of 130,000 square metres, where more than 400 enterprises employ over 10,000 people. According to estimates by the district’s developers, 20,000 people will be living, working and studying in Ülemiste City by 2025. The developers of the area are Mainor Ülemiste AS and Technopolis Ülemiste AS.

Petroleum tower in Muuga Harbour for sale

Object: Petroleum After sustaining a loss of € 99.34 million in Estonia, the Dutch oil tower in Muuga and chemical company Vopak announced on August 17th 2018 Harbour that it is looking to sell four of its petroleum terminals. Beside those in Algeciras, Amsterdam and Hamburg, the Vendor: Vopak announcement also includes the company’s terminal at Muuga Harbour near Tallinn. According to the paper Äripäev, the Price: no fixed company expects acceptable offers within the next 6 to 12 months. price set; acceptable offer expected

Offer released: August 17th 2018

Sale period: presumably between 6 and 12 months

New large scale project at Muuga Harbour

th Estimated On June 28 2018, the Port of Tallinn (“Tallinna Sadam”) and MPG AgroProduction business start: OÜ (“MPG”) signed a cooperation agreement and a building title agreement. These 2020 contracts have been concluded for a term of 99 years and lay the legal basis for the development of an oilseed processing and logistics complex at Muuga Harbour. Completion Tallinna Sadam is one of the largest cargo and passenger port complexes in the Baltic expected: 2024 Sea region, servicing 10.6 million passengers and 19.2 million tons of cargo in 2017; MPG is an Estonian company, established in 2017 by European investors. Estimated According to the agreements, MPG will construct a plant for processing oilseed, a cost: EUR 200 superstructure for loading and unloading raw material and end products on the quays, million as well as loading facilities for transporting raw material and end products to and from

Muuga Harbour using the railway and road network. The project will be located in the eastern part of the harbour and cover an area of about 50ha. MPG’s investment is estimated to total around € 200 million. Once running at full capacity, the project is estimated to have a processing capability of about 1.5 million tons a year, which in turn could result in total additional annual cargo volume of 2.5 million tonnes for Tallinna Sadam. In terms of employment, once running at full capacity the project is expected to create 300 direct jobs and around 1,000 indirect jobs. The project is not expected to start running before 2020, while full capacity operating is not expected before 2024.

Development of Kopli Liinid in Tallinn finally begins

After years of failed attempts to find an investor and developer for the plot Start: 2018 on the Kopli peninsula in northern Tallinn, development of the area has begun. Developer: Fund Ehitus OU Construction company Fund Ehitus OÜ will invest 60-65 Million Euros to turn the run-down area into a modern residential quarter. This part of Estimated northern Tallinn was for decades notorious as a place for drug addicts costs: ca € 65 living in abandond houses and with regular house fires in winter. But now million at last the area’s natural beauty and historical backround is to get the dignity it deserves and will become an integral part of the city. Completion expected: not The developer will renovate the local infrastructure, including a public indicated beach. The site will have over 500 apartments and around 40 single-family homes. Construction starts with coastal quarters at the end of the peninsula. The development’s first apartments are for sale already.

Construction of Reidi Road in Tallinn under way

Construction of Reidi Road, a brand new thoroughfare on the Tallinn seafront, began at Object: Reidi the end of July 2018. The purpose of the road is to provide a direct link from the Russalka Road in Tallinn intersection on Pirita Road to the city's passenger port.

Completion Reidi Road will create a northern passage for transit traffic otherwise passing through the expected: 2020 city centre to ensure a faster and safer connection from Tallinn's ports to the highways of northern Estonia along which international traffic and cargo transport can pass. Estimated costs: ca €40 Work begins at the top of Pikksilma Street in the grounds of the former Kadriorg million Tivoli with the digging of a channel for the road and construction of new shore reinforcement. Altogether 14 km of roads, pedestrian ways and cycle paths are to be built. In the course of the project, 500 trees and some 60,000 bushes will be planted and 40,000 sq m of lawn laid.

KMG Inseneriehituse AS and Verston Ehitus OÜ were selected as the winners in a public procurement tender announced by the City of Tallinn. The first tender for the main contractor failed last year as all entries received exceeded the estimated cost of the project by more than €11 million.

The Reidi Road project is supported by the EU Cohesion Fund and is co-financed by the Estonian state-owned port company “Port of Tallinn”. Construction of the road is scheduled to take about 1.5 years.

The Klauberg Legal Baltics Business Opportunity Survey is published for general information purposes only and does not constitute advice of any kind. The publisher is not liable for any errors or

misrepresentations.

Foto: Kawe AS

New office building in Tallinn Freedom Square

“Kawe City” project won an architectural competition organized by the real estate Object: Office company Kawe in cooperation with the City of Tallinn. The authors of the work are building at architects Üllar Ambos, Pille Noole, Jaan Kuusemets and Jiannis Lykouras. Vabaduse väljak According to the project, a modern office building with an area of 10 770 m2 is to in Tallinn be built at Vabaduse väljak. A total of 27 works participated in the competition, Developer: AS including participants from Portugal and Denmark. Kawe According to the development company, the project best considers the public interest, while the conservative and solid architectural language of the building fits Estimated well with the older buildings in Freedom Square. costs: not indicated The real estate company “Kawe” acquired the plot about a year ago with the idea of launching a detailed plan for construction of a modern commercial building, fitting it into the city square outside Vabaduse Square. In the early stages of the detailed plan, it was decided in cooperation with the Tallinn City Planning Office to organize a public architectural competition to find the best solution for the design of this city space.

VizKey™ investigation software to become global

Vizkey™ is a powerful software tool for law enforcement, military and private corporations for fighting against fraud & criminality. VizKey™enables to turn Investment large amounts of data from different sources into a clear operational picture as decision well as to detect data and cash leaks, cyberattacks and corporate fraud. Criminality expected: becomes transparent. 2018/2019 VizKey™ is implemented in more than 20 countries and localized into several Value est.: not languages including English, Spanish, Japanese, Finnish, Russian, etc. The end- indicated users include law enforcement, national security and military, private

investigators, intelligence, universities, financial institutions, insurances, and tax boards. The main fields of analysis and investigation are corruption, insurance/telecom/financial fraud, human and drugs trafficking, cybercrime, big data, general criminality. VizCase OÜ is seeking for strategic partner and/or investment for fast acceleration to globalize Vizkey™ and to guarantee the development of the features of tomorrow into the software. Low competition, long-term competence of the developer and a large number of existing users are the basis for a future growth of sales until about 7500 (≈25M€) licenses in 3 years.

Fahle Park – living and doing business with style

Estimated Near the city centre only a few free areas are left that allow a contribution to the development of value: urban space and change the integral picture of Tallinn. One of these areas is the old cellulose approx. factory, located just few kilometres from the heart of the city and facing Lake Ülemiste. Over the 20 million next few years, Fausto Capital will breathe new life into the former cellulose factory area by building a modern business and residential quarter there.

The first phase involves a total of 21 500 square metres while total project volume is over 100 000 Executed by: square metres. The architectural solution proposed by OÜ KAOS Arhitektid includes spacious Fausto Capital offices equipped in line with the latest technology, exclusive apartments with panoramic views Architect: as well as restaurants, cultural institutions, sports facilities, plus beauty and health centres. This OÜ KAOS solution involves reconstruction of historic limestone buildings and demolition of the less Arhitektid valuable parts of buildings. The composition of revived and modern buildings connected with a glass-roofed gallery aims to create a stylish quarter in a green urban environment.

The cornerstone of the first phase is a commercial building with parking destined for AS Eesti Completion Meedia. The media concern will get a media building unique for Estonia with radio, television of the first and press editorial offices all under one roof. Total area of the AS Eesti Meedia building will be phase about 8 000 square metres and will house some 550 employees. The cost of development of the expected: first phase is in the order of EUR 20 million. Construction work is scheduled for March 2018, second half of and the first part of Fahle Park will be completed in the second half of 2019.

2019

Bridge to Saaremaa: financing to come from private investors

Recently the Saaremaa bridge project has again attracted lively attention. Estonian businessmen Estimated Raivo Hein and Raivo Kütt plan to construct a bridge using investments from the private sector value: and to break the current stalemate. approx. The plan to replace the ferry connection with a bridge or a tunnel between the mainland and the 500 million biggest Estonian island is not new. The project was discussed several years ago but remained unrealized because of financial and environmental obstacles. Today, construction of a bridge Start across the Suurväin Strait seems to be more realistic as – according to Raivo Hein and Raivo Kütt expected: – the bridge project will no longer require governmental funds but will be carried out by private 2020 investors with the support of pension funds and bank loans. Future maintenance of the bridge Comple- will be covered by crossing fees, which will not exceed the price of ferry tickets. tion According to the project, the bridge will be built parallel to the ferry route and its construction

expected: will allow ferries to pass under it. The length of the bridge will be 7 kilometers and the maximum

3 years height 30 meters above sea level. According to preliminary estimates, construction of the bridge will take three years and will cost ca 500 million euros. after start The project has already been introduced to Prime Minister Jüri Ratas and the government will

soon start working on a political position. As the area forms part of the Natura 2000 network, a

decision should take the environmental impact into account. Extensive research has already

been carried out on bridge construction, but several new studies are still needed.

Saaremaa, with its area of about 2700 km² and a population of around 40,000 inhabitants, is the biggest Estonian island. Today the island is connected to the mainland by air and ferry lines. Construction of a new bridge will not only improve the island's infrastructure and impact the economy of the island but also contribute to the income of the country as a whole.

A Private Island for Sale

No significant On the eastern coast of Estonia’s second big island Hiiumaa lies 24 hectare uninhabited dates picturesque islet of Hõralaiu. The 2 kilometre distance from the coastal port of Hiiumaa included takes about 10 minutes of boating. The island’s coast area is covered with junipers, the central part with pines, birches and rowan trees. The island has had previous inhabitants. Value est.: At the highest point of the Island remains an old farmstead and the old well with - groundwater safe to drink.

This unique island has one immovable property, which belongs to one owner. Construction is allowed to the old farmstead upon submittal of a detailed plan.

“Gate Tallinn” Retail Park Development in Tallinn, Estonia

No significant A large retail park to be developed just on the border of Tallinn. dates included Gate Tallinn is a 62 ha land area that will be developed into the largest retail park in the Baltics with over 100,000 m2 of retail space, featuring the largest agglomeration Executed by: of big-box format stores ranging from 750 to 25,000 m2 the first large-scale Trigon Capital dedicated sports and leisure retail cluster well as the first purpose built fashion

Value est.: outlet centre in the region. EUR 100 million Retail park and fashion outlet concepts offer a wider selection of goods at better prices than conventional shopping centres, and are highly popular retail formats in the Western market, though not yet present in the Baltics.

The Gate Tallinn project has one of the best locations in the greater Tallinn area, sited at the intersection of the main motorway out of Tallinn, the Via Baltica heading to Riga, and the new ring road (due for completion in fall 2017). The main commuter rail line passes nearby and even has a station at the site.

Tunnel from Tallinn to Helsinki- Update

Completion Dubai engineering company ARJ Holding Ltd will invest EUR 100 million. expected 2030 – 2035 According to Mr. Vesterbacka, chief at FinEst Bay Area, the group behind the project, Dubai Executed engineering company ARJ Holding Ltd will invest EUR 100 million in the undertaking. by: City The tunnel is suppose to connect Tallinn and Helsinki. It´s length would be around 90 km, Municipality depending on the route taken. It would significantly increase the carriage of passengers as of Tallinn well as goods between the two states and connect the whole of Scandinavia into a single City railway network. A submarine tunnel would reduce the travel time between Tallinn and Municipality Helsinki to 20 minutes, while it takes between two and three hours by ferry. of Helsinki Finnish Transport Mr. Vesterbacka estimates the total costs at EUR 15 billion. A preliminary study estimates Agency the period of return to be around 35-40 years. About 40-50 per cent of the construction costs should fall on the shoulders of the Estonian and Finnish governments and the EU. The rest Value est.: is expected from private investors. EUR 15 billion Upon completion, the Tallinn-Helsinki tunnel would be the longest submarine tunnel in the world.

Latvia Latvija

Klauberg baltics Rīga office Alberta iela 13, Rīga, LV-1010 Phone + 371 6777 05 04 Fax + 371 6777 05 27 [email protected]

Contact Person: Partner Theis Klauberg, LL.M. Phone: +371 6777 05 04 [email protected]

New Baltic Sea shipping line between Skulte and central Sweden

Significant dates: - According to the Latvian Investment and Development Agency, the port of Skulte is proposed as a major investment possibility in Latvia. Value: - In 2014 started a new project: a Roll-on/roll-off (RORO) terminal, whose aim is to widen the scope of services by 50 %. However, the port authorities are still looking for investors. The terminal includes a new roll-on/roll-off passenger (ROPAX) route, whose advantage is its location - only 50 km from Riga, where the main economic activities and production sites are located. Moreover, due to its favourable location, Skulte might become a useful alternative to other Latvian producers for goods deliveries to Scandinavia. Besides, the project includes involvement of producers from the other Baltic countries, especially Estonia and Lithuania.

22 Improvement of energy efficiency in public buildings Major changes to one of Riga’s most famous sights: TV tower renovation

Significant dates: By 2023, Rīga’s TV tower will be renovated and turned into a major tourist attraction. implementation to be completed by November The project involves rebuilding the tower and its surroundings, 2022. resulting in creation of a glass-cubicle deck known as a “skywalk”, as well as an exciting attraction called “walking on edge”. The project also involves creating the highest and heaviest Foucault pendulum in the world. And more: “Vēju roze” restaurant will open at a height of 94 metres, making the Rīga TV tower one of the most attractive and exciting places in Latvia to visit.

Improvement of energy efficiency in public buildings

Significant dates: The Central Finance and Contracting Agency has announced tender applications a tender for modernisation of state buildings so as to promote accepted until the end of energy efficiency and use of renewable energy sources. 2019; implementation to be The Latvian Cabinet of Ministers has defined 38 objects for completed by November reconstruction. Among them are: Valmiera Drama Theatre (EUR 3.2 2022. million), Riga Eastern Clinical University Hospital (EUR 2.55 million), Riga Circus (EUR 2.55 million), Dailes Theatre (EUR 1.7 million), Latvian Puppet Theatre (EUR 840,000). Value: EUR 32.5 million with co-financing of EUR 27.6 million from the Grants of funding of energy efficiency measures are also planned for European Regional some public benefit organizations: the Latvian Society of the Blind Development Fund. (EUR 1.5 million), Itas Kozakevicas Association of Latvian National Cultural Societies (EUR 1 million), Union of Latvian Theatre Workers (EUR 500,000).

Restoration and preservation of natural heritage of Northern Courland

No significant dates On 17 January 2018 a contract was signed for implementation of a Executed by: Ventspils project titled “Preserving, Exhibiting and Developing Tourism of the municipal institution Cultural, Historical and Natural Heritage of Northern Courland”. “Ventspils muzejs”; partners: Ventspils and The project supports cultural renovation and preservation of the natural Dundaga Municipality, heritage of this historical region and focuses on developing access to Jūrkalne Roman Catholic significant protected areas and updating educational and entertainment Congregation. opportunities for visitors.

Value: EUR 5.2 million The project covers work on reconstruction of several architectural with co-financing from monuments (Dundaga Castle, Jūrkalne St. Joseph Roman Catholic European Regional Church) and on developing infrastructure for natural sights (e.g. Development Funds building pedestrian and cycling routes, reconstructing the bridge over amounting to EUR 4.5 the River Irbe). million

Financing needed for start-up: supplier to furniture manufacturers

Financing Under the product name “Vilkne”, a young Latvian start-up is seeking venture period: capital financing for production of high-end drawers for designer furniture such as until kitchens. December 2018 “Vilkne” is a prefabricated drawer concept for exclusive furniture, aimed at German and international cabinetmakers and furniture manufacturers. The advantages of Executed the concept are a simple and efficient online shop, high-quality materials combined by: with modern design, and two completely new features for wooden drawers: “Vilkne” adjustable drawer fronts and an “easy clean” concept of rounded-down inside edges. The concept facilitates the production cycle for cabinetmakers and helps reduce Value: costs – while adding extra features. EUR 550 000 On the basis of a full-scale business plan, “Vilkne” has already been approved a loan by Latvia’s state-owned development bank ALTUM amounting to EUR 180 000, mainly to establish a production site and acquire machinery.

New industrial hub planned on the old Liepajas Metalurgs site

In the future, numerous different companies could occupy the site formerly occupied by the insolvent metal processing plant Completion “Liepajas Metalurgs”. expected – The municipality of Liepaja, the Latvian Investment and Development Agency and the Latvian Privatization Agency are currently discussing Executed by: establishing an industrial centre. – The parties stressed the well-developed infrastructure such as gas, electricity

and water. Already a couple of companies which acquired parts of Liepajas Value est.: – Metalurgs during the insolvency proceedings are operating on the site. In addition, future private involvement in the old assets of Liepajas Metalurgs remains an option. Especially the blast furnace, which now belongs to “Felm”, a daughter company of the Privatization Agency.

Business incubators will receive EUR 32.8 million

Latvian Investment and Development Agency (LIAA) will provide

No significant funding for new regional companies and startups. dates to indicate

Executed by: Investment aims to support creation and development of new and LIAA competitive businesses in Latvia’s regions. LIAA will provide businesses

Value est.: with an entrepreneurial environment plus consultations and advice in EUR 32.8 mil. general and on specific business matters. Available funding will consist of

EUR 25.7 million in regional development field and EUR 7.1 million for

startups, overall a great possibility to start business in Latvia.

Planning of bypass road for A7 highway

Bypass road to be built for one of Latvia’s most traffic-congested and

Construction busiest highways. due to begin

in 2019 While the A7 highway is one of the busiest roads leading to Riga, it remains highly congested and inconvenient for the residents of Kekava, a small town

Executed by: that the highway passes through. In fact, over 17,000 vehicles use the highway

State Joint on a daily basis, while the number of heavy transport vehicles exceeds the Stock Company optimal figure three times, thus substantially advancing road surface decay. “Latvian State Roads” In efforts to alleviate traffic problems and eliminate heavy traffic flow through the town of Kekava, lawmakers are planning to build a 17-kilometer long bypass

with numerous traffic hubs, tunnels and a bridge. The overall cost of the project

Value: is expected to reach EUR 78 million. While the first public tenders are expected EUR 78 million to be announced by the end of 2017, construction is likely to start in 2019 and conclude in 2021.

Electrification of railway network

No Electrification project announced for railway networks Daugavpils-Riga

significant and Krustpils-Riga. dates

Executed by: In efforts to further promote and modernize the currently archaic transit network in

State Joint Latvia, railway lines from Daugavpils and Krustpils to Riga will be electrified. As of

Stock Company 2017, only 14% of Latvia’s rail network lines are electrified, resulting in grave “Latvian consequences to the environment due to pollution arising from diesel emissions. Railway” Similarly, electrification will reduce cargo transportation costs, with annual savings

Value: for business owners amounting to up to EUR 15 million.

EUR 519

million, with While the project was initially supposed to electrify lines leading to Ventspils, the co-financing current project was considered more business-friendly due to the increasing annual from the

European cargo turnover of Riga seaport.

Cohesion Fund

amounting to

EUR 347

million

Construction of logistics center

Completion “Rimi Baltic” to build a new central logistics hub in Latvia. expected by 2021 Limited liability company “Rimi Baltic” has announced it will construct a new logistics

Executed by: center in Latvia to provide for the increased demand within the Baltic region. Limited Alongside the logistics hub, a separate central office covering the region is planned Liability too. Company According to a spokesperson of “Rimi Baltic”, demand in the coming years is expected “Rimi Baltic” to significantly grow specifically in Latvia, consequently allowing it to become the

Value: main logistics center in the Baltic region. The completed project will encompass an

EUR 75 million 2 area of almost 70,000m , thus allowing for a 150% increase in annual export turnover. Additionally, the central logistics hub will significantly curb the yearly greenhouse emissions and fuel consumption due to the projected decrease in yearly cargo transportation mileage amounting to 1.35 million kilometers.

The enterprise plans to invest approximately EUR 75 million, with EUR 64 million

allocated for the warehouse, and another EUR 11 million for the establishment of a central Baltics-wide office.

Planning and development of multimodal transport hub

Completion A new multimodal transport hub infrastructure project is being expected by developed in Riga 2024 Following a proposal set forth by the Ministry of Transportation, a new multimodal

transport hub project is currently under development. Taking into account the Executed by: Ministry of infrastructure changes caused by upcoming construction works for the completion of Transport the Rail Baltica project, an area amounting to over 40,000 square meters has been Value: allocated for the purposes of setting up such infrastructure center. EUR 11 million Consequently, local citizens will gain much needed access to various public

transportation options, thus curbing carbon emissions and substantially eliminating

other harm caused to the environment due to the heavy use of private vehicles. With a projected parking lot taking up almost 12,000 square meters, the planners expect to meet projected demand for years to come. Similarly, the center will include numerous commercial spaces to increase its attractiveness to investors from various industries.

Lithuania Lietuva

Klauberg baltics Vilnius office Olimpiečių str. 1-37, LT-09235 Vilnius Phone +370 5 241 69 94 Fax +370 5 210 02 11 [email protected]

Contact Person: Sigita Sriubaite Phone: +370 6 192 87 87 [email protected]

Plans for nonsubsidized wind Energy Park revealed

Investment E energija group announces plans for a 150 MW wind energy park planned for E energija ‒ a holding of 12 companies, already active for more than 20 years in 2018-2023 the energy sector ‒ has announced plans to construct a 150 MW wind energy

Executed by: park in Lithuania. Text E energija has indicated an intention to carry out the plan without relying on subsidies or other state-dependent measures. If successful, this would be one of the first significant renewable energy projects in Lithuania that does not rely on Value est.: state support and funding. EUR 150 mln.

Maxima Grupė is looking for investors

Executed by: One of the biggest business groups in Lithuania, Maxima Grupė, is Maxima going to issue bonds Grupė, UAB The owner of the biggest retail chain in Lithuania, also controlling retail chains across Latvia, Estonia, Poland and Bulgaria is going to issue bonds with an Value est.: expected value of not less than EUR 300 mln and a duration of 5 years. EUR 300 million Standard & Poor's has given the bonds a BB+ credit rating in June. The bonds are distributed with the assistance of “SEB bank”, “BNP Paribas“ and “Deutsche Bank”. Trade in Euronext Dublin and Nasdaq Vilnius is expected.

„Continental“ coming to Lithuania

Continental officially announced the beginning of its new manufacturing plant in Kaunas Free Economic Zone Investment planned for The tire manufacturing giant officially started the construction of its 2018-2023 manufacturing plant in the Kaunas Free Economic Zone (Kaunas FEZ). This project is considered as one of the most important projects in the rapidly Executed by: developing Kaunas FEZ, which attracts continuous investments and attention Continental during the last years.

Continental also revealed its plans to invest EUR 95 mln. and create 1 000 new Value est.: job positions inthe upcoming 5 years.. EUR 95 mln.

Globally active furniture producer is planning major investment

Estimated Major player in furniture production SBA Group is planning to invest project EUR 84,8 million to their business expansion in the year 2018

period: two years The vast majority of funds shall be attributed to the development of furniture production facilities owned by the group, their modernization and production

capabilities expansion. Part of the investment is also dedicated to the business Executed center projects in Kaunas and Vilnius. by: SBA Group SBA group owns seven furniture production and three knitwear manufacturing facilities. Investors highlight the importance of rising technologies, thus big amount of money will be dedicated to modernization, technologies’ Value est.: EUR 84,8 improvement, robotic implementation. million In addition, constructions of the new logistics center and furniture component factory near Klaipėda are starting this year, SBA group is investing EUR 30 mln. to this project, it is planned to be completed by 2020.

Modernization of detention facilities

A public-private partnership to modernize detention facilities in Lithuania. Completion

expected by

2022 In July 2014 the Lithuanian Government approved a new detention facilities modernisation

programme with a scheduled deadline for 2022. The programme involves construction of a

Executed by: new detention facility on the outskirts of Vilnius and construction of new detention facilities

Ministry of in Šiauliai, Klaipėda and Panevėžys on a PPP basis. Justice;

Lithuanian 2 Prison Vilnius detention facility, with 1620 beds (29 000 m ), will be the first to tender out. It is

Department expected that a new detention facility near Vilnius will be built and the inmates currently held

in Lukiškės prison (located in the city centre) will be moved out. After this project, the next

Value est.: project in the pipeline is Šiauliai detention facility, with 800 beds.

EUR 40 million

for new facility The government is prepared to invest a large portion of budget funds, but private co-investors in Vilnius; are also sought. Any interested investors are invited to join the government in investing their ≈ EUR 290 funds and executing the project as a PPP. The plan is for the partnership to last for 22 years, million for the during which the private partner will develop and maintain the infrastructure and the whole government, in return, will pay an annual fee of EUR 13 million. After the partnership, the programme. government takes over ownership of the infrastructure.

Privatization of “Baltija” rest house in Palanga

Privatization of desirable real estate on the Baltic Sea coast.

“Baltija” is the biggest rest and treatment complex in the Lithuanian resort town of No significant Palanga, which includes different levels of hotels: the 2 star “Vyturys” hotel dates (conference room, health service facilities and rehabilitation centre), the 3 star indicated; “Zilvinas” hotel (24 rooms, tennis courts, aesthetics and beauty centre), the „Estetic Italia Baltic” aesthetics and beauty centre and the “Baltija” rehabilitation centre .

Executed by: At the moment, services are not available, as the buildings have not been renovated. State Asset Fund The government decided to dispose of the shares in the complex to the Ministry of

Economy. The market value of buildings, structure and other assets is ca EUR 6 million. This will be the value of the registered capital of a new company Value est.: which will restructure the state-owned enterprise. EUR 6 million. After restructuring, the Ministry of Economy will decide on transfer of the complex to the State Asset Fund, which in turn will start the process of privatization.

Police Infrastructure PPP projects in Kaunas and Panevezys

Many soviet-era police buildings in Lithuania are out of date and unsuitable for Completion today’s police functions. To address this issue, the Police Department, under the expected: Ministry of the Interior, has launched a tender for Police Infrastructure PPP The whole project projects in Kaunas and Panevezys. is expected to be Potential private partners expressing interest in these PPPs will have to participate completed by 2032. in a negotiated procedure. Negotiating the tender consists of two parts: one dedicated to Kaunas police infrastructure PPP and the other to Panevezys police infrastructure PPP. This means that two separate contracts will need to be signed. Executed by: Total length of the contracts is 15 years. Selected private partners will have the Police responsibilities such as design, construction of buildings, maintenance and Department financing of the police stations. The fifteen-year contracts will be divided into two under the Ministry of the parts: the first three years of the total project is dedicated to design and Interior construction of buildings and the remaining twelve years is to be dedicated to building maintenance. Capital expenditure on the project is set at 12.4 million Euro for the Kaunas project Value est.: and 14.8 million Euro for the Panevezys project. The deadline for investors EUR 27.2 million. interested in taking part in this project to submit participation requests for the Police Infrastructure PPP tender is 11:00 on 16 August.

Modernization of Lithuanian Zoo in Kaunas

An optimistic future for the unmodernized Lithuanian Zoo.

No significant dates indicated The Kaunas City Council has approved a detailed plan for modernization of the

Executed by: city zoo. According to the Ministry of Environment, which is the acting manager

Kaunas City of the building, this decision opens the way for EUR 11.5 million EU financial

Council, support.

Ministry of According to the company “Project Training centre”, which performed a Environment feasibility study on the zoo’s modernization, modernization would require an

Value est.: injection of EUR 29 million. The EUR 11.5 million is just for the first step.

EUR 11.5 million. Kaunas zoo houses some 2020 animals, many of them belonging to endangered

species. The zoo is a candidate for membership of the European Association of Zoos and Aquaria, involved in the European breeding programme of rare and endangered animals. Area of zoo: 15.6 ha.

“Lithuanian Airports” seek investors

Preparations are under way for state owned company “Lithuanian Concession Airports” to enter into a concession agreement with a private agreement investor. Possible concessionaires are already being sought. expected to be entered in until 2019 The government has approved a plan for “Lithuanian Airports” to enter into a concession arrangement. The state-owned company needs private Executed by: investment to expand and modernise the airport infrastructure and Lithuanian operational efficiency as demand for air travel keeps steadily growing in

Airports Lithuania.

Value est.: In exchange for private investment, the concessionaire would gain the - privilege of operating the infrastructure and carrying out commercial activities at Vilnius (VNO), Kaunas (KUN) and Palanga (PLQ) airports for up to 20-25 years. The state would keep ownership of all infrastructure objects. No solid estimates are available yet as to the value of the concession

agreement.

Major upgrade of Klaipeda seaport

Completion Klaipeda seaport channel to be deepened to 17 m. by 2020 expected by 2020 Currently the Klaipeda seaport channel is 15 metres deep. That is two metres less Executed by: than Riga seaport and one metre less than Ventspils seaport. The current depth of Klaipeda seaport Klaipeda seaport restricts the size and loading of big carrier ships entering the port. With a depth of 17 metres, by 2020 Klaipeda seaport could service virtually any Value est.: carrier ship operating in the Baltic Sea. EUR 330 million In the period between 2017 and 2020, Klaipeda seaport is planning to procure construction works (most likely a series of public procurement procedures) worth some EUR 330 million.

The repair and maintenance of 3.500 kilometers railway

Estimated Substantial railway repair and maintenance project planed for project period is the next two years

2 years

“Lietuvos geležinkeliai” AB announced two public tenders with estimated

combined value of EUR 97 million. Operator is expecting to find Executed by: contractors for repair and maintanence services for 2 years period, with an Lietuvos extension possibility for two more years. geležinkeliai AB Maintenance services are estimated to reach EUR 20 million worth. The contractor would have to take care of almost 3.500 kilometers of the Value est.: railway in Lithuania. In addition, the railways’ repair in Vilnius, Kaunas, EUR 97 million Šiauliai and Klaipėda regions is estimated to be worth around EUR 76,35 million.

Railway electrification

Lithuanian part of the interstate railway connection with Project is Belarus is set for electrification expected to be completed by It is expected to electrify the whole railway line section beginning at 2022 Lithuania-Belarus border and ending in Klaipėda. Overall project is considered to be worth EUR 349,1 million where EUR 224,1 million should Executed by: be funded by EU Cohesion Fund and the rest by “Lietuvos geležinkeliai” Lietuvos AB. geležinkeliai AB The railway part, which is planned to be electrified, is a part of the IXB

corridor and, according to “Lietuvos geležinkeliai” AB, use of it constitues Value est.: a 3/4 cargo transportation turnover and 2/3 passenger transportation 349,1 million turnover. The Ministry of Tranport and Communications expects the project to improve the railway use efficiency even more. Project is expected to be completed by 2022.

National Stadium project in Vilnius

Long expected National Stadium project is getting a new start

Concession The first time construction of the National Stadium was started in 1985 but due agreement to the difficulties were several times stopped, renewed and stopped again. expected to be signed in the Design, plans and the overall concept changed several times through the period, summer 2019 but now it looks like the project is getting necessary boost to get it restarted and hopefully finished this time. Public procurement tender, which took one and half year and the unknown fate Executed by: of the National Stadium, which lasted more than 30 years is finally reaching a Vilnius conclusion with an intensive negotiating going with a joint venture company municipality group “Icor”. Complex of the National Stadium would include a football stadium holding 15 Value est.: 000 attendants, 6 basketball courts, handball court, space for gymnastics, EUR 79,9 million boxing and physical fitness rooms, athletics stadium, library, spaces for

conferences and kindergarten.The complex expected to be built in 3 years. Overall, estimated price for 25 year length public-private partnership project is EUR 79,9 million.

Modernization of the highway in Kaunas

Essential transport intersection and bridge in the main national The whole highway and part of Via Baltica planed for modernization project is expected to be Considering the road overload and a necessity to improve traffic conditions for completed by transit and intermingling local city transport, the road section of A1, biggest and 2024 busiest national highway (a part of pan-Baltic Via Baltica) is planned to be

Executed by: modernized and adapted to the increased traffic flow. Road It is planed to modernize the road section near Kaunas by expanding it to 8 traffic Administration lines: 4 lines for transit traffic and 4 connecting roads for local traffic. Construction under the Ministry of a new bridge with two lines and modernization of the existing 54 year old bridge of Transport and is included in the project. Communications Public tender for preparing the design is planned to be announced in 4-5 months Value est.: and public tender for implementing the project in 9-10 months. New bridge with EUR 100 million two traffic lines is expected to be finished by 2019 and the overall project completion date is set on 2024. Estimated project price is EUR 100 million where EUR 60 million would be allocated to the bridges construction.