Baltic Focus — Tech & Energy Watch
🇪🇪 Estonia’s Skeleton opens €220M supercapacitor plant in Leipzig
Skeleton Technologies has opened a €220 million supercapacitor plant near Leipzig — one of the largest deep-tech industrial investments from the Baltics into Germany.
The factory will produce Skeleton’s new-generation supercapacitors and its GrapheneGPU power-stabilisation systems for AI data centres.
According to the company, these systems can reduce peak loads and energy use by up to 44%, and help achieve up to 40% more computing output under the same power constraints.
Current customers for Skeleton’s grid-stabilisation and energy-storage solutions include Siemens, General Electric, and Hitachi Energy.
German grid operators are already using Skeleton systems as a “last-line protection layer” for preventing overloads in networks with high volumes of renewable generation. Supercapacitors react within milliseconds, absorbing sudden spikes and stabilising voltage — a critical capability for Europe’s increasingly volatile electricity systems.
Skeleton notes that the technology is relevant not only for AI infrastructure and industrial peak-shaving, but also for sectors that require fast-response power systems — including mobility, rail, and potential defence applications.
Context:
The Leipzig plant strengthens the Baltic region’s industrial footprint inside Europe’s critical-energy ecosystem. Skeleton is one of the very few Baltic-born deep-tech companies with a direct role in EU grid security and the fast-growing AI power-infrastructure market.
BSM © 2025 | balticfocus.org
#balticfocus
🇪🇪 Estonia’s Skeleton opens €220M supercapacitor plant in Leipzig
Skeleton Technologies has opened a €220 million supercapacitor plant near Leipzig — one of the largest deep-tech industrial investments from the Baltics into Germany.
The factory will produce Skeleton’s new-generation supercapacitors and its GrapheneGPU power-stabilisation systems for AI data centres.
According to the company, these systems can reduce peak loads and energy use by up to 44%, and help achieve up to 40% more computing output under the same power constraints.
Current customers for Skeleton’s grid-stabilisation and energy-storage solutions include Siemens, General Electric, and Hitachi Energy.
German grid operators are already using Skeleton systems as a “last-line protection layer” for preventing overloads in networks with high volumes of renewable generation. Supercapacitors react within milliseconds, absorbing sudden spikes and stabilising voltage — a critical capability for Europe’s increasingly volatile electricity systems.
Skeleton notes that the technology is relevant not only for AI infrastructure and industrial peak-shaving, but also for sectors that require fast-response power systems — including mobility, rail, and potential defence applications.
Context:
The Leipzig plant strengthens the Baltic region’s industrial footprint inside Europe’s critical-energy ecosystem. Skeleton is one of the very few Baltic-born deep-tech companies with a direct role in EU grid security and the fast-growing AI power-infrastructure market.
BSM © 2025 | balticfocus.org
#balticfocus
S&P affirms Latvia’s “A” rating with a stable outlook
S&P Global has confirmed Latvia’s sovereign credit rating at A with a stable outlook. According to the agency, Latvia is expected to maintain fiscal discipline and manage external challenges over the next two years.
Key points from S&P:
• The government is expected to stick to a strict fiscal policy and keep public debt at or below 55% of GDP, even as defence spending rises in 2026–2028.
• General government deficit is projected to average 3.8% of GDP during 2026–2028.
• GDP per capita has increased by almost 30% since 2021 — a sign of economic resilience.
• Growth forecast: 1.5% in 2025 and an average of 2.5% in 2026–2028, supported by EU funds and public investment in infrastructure, security, and defence.
• The labour market remains resilient and may tighten further, especially in construction.
S&P’s assessment:
Latvia’s medium-term prospects depend on effective absorption of substantial EU funding and the continuation of structural reforms aimed at strengthening growth potential. The stable outlook reflects the expectation that geopolitical risks will not escalate into the territory of NATO member states.
Why this matters for the Baltics:
A stable “A” rating reinforces regional investor confidence at a time when all three Baltic states are increasing defence expenditure.
BSM© 2025 | balticfocus.org #balticfocus
S&P Global has confirmed Latvia’s sovereign credit rating at A with a stable outlook. According to the agency, Latvia is expected to maintain fiscal discipline and manage external challenges over the next two years.
Key points from S&P:
• The government is expected to stick to a strict fiscal policy and keep public debt at or below 55% of GDP, even as defence spending rises in 2026–2028.
• General government deficit is projected to average 3.8% of GDP during 2026–2028.
• GDP per capita has increased by almost 30% since 2021 — a sign of economic resilience.
• Growth forecast: 1.5% in 2025 and an average of 2.5% in 2026–2028, supported by EU funds and public investment in infrastructure, security, and defence.
• The labour market remains resilient and may tighten further, especially in construction.
S&P’s assessment:
Latvia’s medium-term prospects depend on effective absorption of substantial EU funding and the continuation of structural reforms aimed at strengthening growth potential. The stable outlook reflects the expectation that geopolitical risks will not escalate into the territory of NATO member states.
Why this matters for the Baltics:
A stable “A” rating reinforces regional investor confidence at a time when all three Baltic states are increasing defence expenditure.
BSM© 2025 | balticfocus.org #balticfocus
🇱🇻 Latvenergo 9M 2025 — revenue down 11%
Core facts:
• Turnover in 9M 2025 fell –11.1% to €1.16bn; profit –37.3% to €164m.
• Main cause — low Daugava inflow → hydro output –20% YoY → total production –15.3%.
• EBITDA down –28%, energy sales in Baltics –6.4%, gas sales –10%.
• RES portfolio jumps to 374 MW in operation + 770 MW in pipeline (= 1.14 GW), plus 5 BESS projects.
• Investments doubled to €614m, of which €447m went into new solar/wind.
• Elektrum customer base still grows (power +2.9%, gas +17.7%).
• Green bond issue (€400m) oversubscribed ×5.5.
New signal:
For the first time Latvenergo’s report makes it clear why the company rushed the €400m green bond issuance:
→ covering a sharp ramp-up of CAPEX into RES (almost half a billion in 9 months) and securing financing for the 1.1 GW project pipeline + BESS.
This scale cannot be financed from operating cashflow, which fell due to low hydro production and lower market prices.
Context (Baltic significance):
Latvenergo’s 11% revenue drop is not fully explained by hydrology — the region is shifting to high-CAPEX energy infrastructure, and public utilities are moving from “cash-rich” to “investment-heavy” mode.
The +5.5× oversubscription shows European money actively flows into Baltic energy assets, even as profits fall.
Source: Latvenergo, Nasdaq Riga.
BSM © 2025 | balticfocus.org #balticfocus
Core facts:
• Turnover in 9M 2025 fell –11.1% to €1.16bn; profit –37.3% to €164m.
• Main cause — low Daugava inflow → hydro output –20% YoY → total production –15.3%.
• EBITDA down –28%, energy sales in Baltics –6.4%, gas sales –10%.
• RES portfolio jumps to 374 MW in operation + 770 MW in pipeline (= 1.14 GW), plus 5 BESS projects.
• Investments doubled to €614m, of which €447m went into new solar/wind.
• Elektrum customer base still grows (power +2.9%, gas +17.7%).
• Green bond issue (€400m) oversubscribed ×5.5.
New signal:
For the first time Latvenergo’s report makes it clear why the company rushed the €400m green bond issuance:
→ covering a sharp ramp-up of CAPEX into RES (almost half a billion in 9 months) and securing financing for the 1.1 GW project pipeline + BESS.
This scale cannot be financed from operating cashflow, which fell due to low hydro production and lower market prices.
Context (Baltic significance):
Latvenergo’s 11% revenue drop is not fully explained by hydrology — the region is shifting to high-CAPEX energy infrastructure, and public utilities are moving from “cash-rich” to “investment-heavy” mode.
The +5.5× oversubscription shows European money actively flows into Baltic energy assets, even as profits fall.
Source: Latvenergo, Nasdaq Riga.
BSM © 2025 | balticfocus.org #balticfocus
Baltic Focus — Defence & Maritime Signals
Estonia shortlists four shipbuilders for new Navy vessels
The Estonian Centre for Defence Investments has shortlisted four companies for the next stage of negotiations to build new Navy vessels. The programme foresees two ship classes: a ~100-metre blue-water vessel and a 60–80-metre coastal operations ship. Estonia aims to build as much as possible domestically, while weapons and communications systems will be sourced from abroad.
The priority remains mine counter-measure (MCM) capability, which is gradually shifting toward unmanned, low-crew and modular systems. Under Estonia’s 10-year defence plan, offers are requested for two large and two small vessels; the 15-year outlook expands this to three large and six small. European offers remain costly — up to 30% more expensive than the cheapest international bids.
Context:
A joint Baltic naval development plan drafted a decade ago was never fully implemented. Today, hybrid maritime tasks — reconnaissance, environmental monitoring, policing, and protection of underwater infrastructure — dominate regional defence planning. Estonia’s shipbuilding choice will shape Baltic maritime readiness for the 2030s.
Contractor Spotlight — Baltic Workboats
A strategically relevant Baltic industrial player
Baltic Workboats (BWB) stands out among the shortlisted candidates due to its proven track record with EU border, coast guard and state maritime agencies, and because it is one of only two shipyards in the Baltic region capable of building vessels in the 60–100 m category.
1) Offshore-class capability (up to 80 m)
BWB is currently under contract with Belgium’s state operator DAB Vloot to design and build pilot station vessels up to 80 metres in length — full offshore-class ships, comparable in scale to the new Estonian requirements.
2) Proven supply history for EU border & coast guard services
Over the past decade, BWB has delivered:
26–27 m patrol craft for the Swedish Coast Guard;
24 m wave-piercing patrol vessels for the Lithuanian Coast Guard / State Border Guard Service (multiple units, including the vessel Gintaras Žagunis);
hybrid patrol vessels for the Estonian Police and Border Guard Board (PPA), including the patrol ship Raju.
This places BWB among the very few regional shipbuilders with a direct portfolio of EU border security clients.
3) Critical indigenous capacity for Baltic defence
Baltic naval shipbuilding is effectively concentrated in two actors — BLRT and BWB. They do not compete directly, but complement each other’s capacities. For small states, maintaining such industrial capability is strategically vital and rare.
4) Alignment with modern naval concepts
BWB already designs platforms for unmanned, low-crew and modular mission systems. This aligns with NATO’s evolving MCM approach and Estonia’s stated priorities in the new programme.
5) A hidden industrial champion
Much like Skeleton Technologies in energy storage, BWB is a quiet technological champion: deep-tech, export-ready, and strategically important — yet under-reported in Baltic media. Estonia’s naval procurement process may be the moment when the company becomes more visible to the region.
BSM © 2025 | balticfocus.org #balticfocus
Estonia shortlists four shipbuilders for new Navy vessels
The Estonian Centre for Defence Investments has shortlisted four companies for the next stage of negotiations to build new Navy vessels. The programme foresees two ship classes: a ~100-metre blue-water vessel and a 60–80-metre coastal operations ship. Estonia aims to build as much as possible domestically, while weapons and communications systems will be sourced from abroad.
The priority remains mine counter-measure (MCM) capability, which is gradually shifting toward unmanned, low-crew and modular systems. Under Estonia’s 10-year defence plan, offers are requested for two large and two small vessels; the 15-year outlook expands this to three large and six small. European offers remain costly — up to 30% more expensive than the cheapest international bids.
Context:
A joint Baltic naval development plan drafted a decade ago was never fully implemented. Today, hybrid maritime tasks — reconnaissance, environmental monitoring, policing, and protection of underwater infrastructure — dominate regional defence planning. Estonia’s shipbuilding choice will shape Baltic maritime readiness for the 2030s.
Contractor Spotlight — Baltic Workboats
A strategically relevant Baltic industrial player
Baltic Workboats (BWB) stands out among the shortlisted candidates due to its proven track record with EU border, coast guard and state maritime agencies, and because it is one of only two shipyards in the Baltic region capable of building vessels in the 60–100 m category.
1) Offshore-class capability (up to 80 m)
BWB is currently under contract with Belgium’s state operator DAB Vloot to design and build pilot station vessels up to 80 metres in length — full offshore-class ships, comparable in scale to the new Estonian requirements.
2) Proven supply history for EU border & coast guard services
Over the past decade, BWB has delivered:
26–27 m patrol craft for the Swedish Coast Guard;
24 m wave-piercing patrol vessels for the Lithuanian Coast Guard / State Border Guard Service (multiple units, including the vessel Gintaras Žagunis);
hybrid patrol vessels for the Estonian Police and Border Guard Board (PPA), including the patrol ship Raju.
This places BWB among the very few regional shipbuilders with a direct portfolio of EU border security clients.
3) Critical indigenous capacity for Baltic defence
Baltic naval shipbuilding is effectively concentrated in two actors — BLRT and BWB. They do not compete directly, but complement each other’s capacities. For small states, maintaining such industrial capability is strategically vital and rare.
4) Alignment with modern naval concepts
BWB already designs platforms for unmanned, low-crew and modular mission systems. This aligns with NATO’s evolving MCM approach and Estonia’s stated priorities in the new programme.
5) A hidden industrial champion
Much like Skeleton Technologies in energy storage, BWB is a quiet technological champion: deep-tech, export-ready, and strategically important — yet under-reported in Baltic media. Estonia’s naval procurement process may be the moment when the company becomes more visible to the region.
BSM © 2025 | balticfocus.org #balticfocus
Baltic Shift Map — Monday Signals
1) Real incomes still below 2021 peak
Baltic households enter winter with purchasing power weaker than before the 2021–2022 shock. Lithuania shows the best rebound, but no country has returned to the pre-inflation peak.
2) Estonia activates next-generation air surveillance
The new GM400 Alpha radar expands Estonia’s low-altitude drone detection. This is part of a multi-site upgrade that will give Estonia a unified radar layer by 2027.
3) Latvia’s agrifood capital moves abroad
Agrova International acquires UK-based Sunrise Group for €40m — one of Latvia’s largest outbound deals. The transaction gives a Baltic producer full access to the UK’s highly competitive retail market.
4) EU infringement package pressures Baltic energy rules
All three states appear for delayed transposition of key directives, especially the revised Energy Efficiency Directive. The bottleneck: energy systems and legislation are adapting slower than EU-level obligations.
5) Estonia ships record Panamax grain load
Baltic Agro loads 75,000 tons of wheat at Muuga — one of the largest shipments in recent years. Regional comparison shows Estonia catching up, while Latvia and Lithuania remain steady high-volume exporters.
6) Latvia’s Kārums enters South Korea
The first confirmed Baltic dairy entry into South Korea is now en route via Coupang. This is a small but important signal for Baltic exporters seeking non-EU markets.
7) Defence shift: Estonia shortlists shipbuilders
Estonia moves forward with two new Navy vessel classes, prioritising unmanned and modular mine-countermeasure capability. Baltic Workboats emerges as a strategically significant regional contractor.
1) Real incomes still below 2021 peak
Baltic households enter winter with purchasing power weaker than before the 2021–2022 shock. Lithuania shows the best rebound, but no country has returned to the pre-inflation peak.
2) Estonia activates next-generation air surveillance
The new GM400 Alpha radar expands Estonia’s low-altitude drone detection. This is part of a multi-site upgrade that will give Estonia a unified radar layer by 2027.
3) Latvia’s agrifood capital moves abroad
Agrova International acquires UK-based Sunrise Group for €40m — one of Latvia’s largest outbound deals. The transaction gives a Baltic producer full access to the UK’s highly competitive retail market.
4) EU infringement package pressures Baltic energy rules
All three states appear for delayed transposition of key directives, especially the revised Energy Efficiency Directive. The bottleneck: energy systems and legislation are adapting slower than EU-level obligations.
5) Estonia ships record Panamax grain load
Baltic Agro loads 75,000 tons of wheat at Muuga — one of the largest shipments in recent years. Regional comparison shows Estonia catching up, while Latvia and Lithuania remain steady high-volume exporters.
6) Latvia’s Kārums enters South Korea
The first confirmed Baltic dairy entry into South Korea is now en route via Coupang. This is a small but important signal for Baltic exporters seeking non-EU markets.
7) Defence shift: Estonia shortlists shipbuilders
Estonia moves forward with two new Navy vessel classes, prioritising unmanned and modular mine-countermeasure capability. Baltic Workboats emerges as a strategically significant regional contractor.
Baltic Social Radar · November 24–30
The Baltic Social Radar is a weekly scan of non-media conversations across X (formerly Twitter) in Latvia, Lithuania, and Estonia.
1) Language and Identity Pushback
Native-language debates dominated Latvia, Lithuania, and Estonia — from criticism of Latvian Radio’s bilingual content to Estonian folklore threads and Lithuanian cultural rituals. Pride in linguistic heritage collides with irritation over multilingual pressures. Sentiment: Mixed (40% of all posts in this theme; ~150 likes/post). Overall weekly mix: 55% positive cultural pride / 35% negative on security & economics / 10% neutral.
2) Security Mindset Rising
Following aviation incidents and heightened regional tensions, users increasingly discuss “readiness”: evacuation plans, critical-infrastructure fears, personal preparedness. Tone is anxious but often framed through humor or resilience. Sentiment: Negative with positive resolve (e.g., 65% of Estonians “ready to fight”). Engagement spikes above 200 likes.
3) Costs, Inflation, and Big Projects
OCTA price hikes, Rail Baltica debates, EU policy complaints — economic pressure remains a daily frustration. Users critique affordability but also imagine pragmatic fixes (shadow-economy reforms, digitalization). Sentiment: Negative–mixed (~15% of native posts; ~120 likes/post).
4) Nostalgia and Cultural Roots
Posts on Riga markets, Lithuanian Catholic festivals, and Estonian Kalevipoeg myths formed a softer cultural layer. Humor and melancholy merge in everyday reflections about “how the Baltics used to be.” Sentiment: Positive–mixed (~10% of posts; 100+ likes).
5) Youth and Education Debates
Esports nominations, school reforms, teacher-citizenship debates, digital-learning perks — youth-oriented topics trended mid-week. Sentiment: Positive with critical notes (~10% of posts; viral among parents).
Russian-Language Baltic Trends
1) Ukraine Solidarity
High-engagement Russian-language posts strongly align with Baltic support for Ukraine: donations, drone funding, symbolic actions. Sentiment: Positive (40% of RU-language posts; 200+ likes).
2) Language Mandates as Tension
Frustrations with Latvian/Lithuanian language requirements dominate RU-language debates, mixed with calls for empathy and dialogue. Sentiment: Negative–mixed (25% of posts; heated threads ~150 likes).
3) Migration & Urban Nostalgia
Stories of selling apartments, moving abroad, or missing the “old Riga/Vilnius” continue to trend. Sentiment: Mixed (20% of posts; ~100 likes).
4) Hybrid Threat Anxiety
Speculation on sabotage behind the Vilnius crash and border incidents remains present. Sentiment: Negative (10% of posts; ~120 likes).
5) Cultural Positives
Festivals, markets, community events — a small but consistent positive layer. Sentiment: Positive (5% of posts; ~80 likes).
The Baltic Social Radar is a weekly scan of non-media conversations across X (formerly Twitter) in Latvia, Lithuania, and Estonia.
1) Language and Identity Pushback
Native-language debates dominated Latvia, Lithuania, and Estonia — from criticism of Latvian Radio’s bilingual content to Estonian folklore threads and Lithuanian cultural rituals. Pride in linguistic heritage collides with irritation over multilingual pressures. Sentiment: Mixed (40% of all posts in this theme; ~150 likes/post). Overall weekly mix: 55% positive cultural pride / 35% negative on security & economics / 10% neutral.
2) Security Mindset Rising
Following aviation incidents and heightened regional tensions, users increasingly discuss “readiness”: evacuation plans, critical-infrastructure fears, personal preparedness. Tone is anxious but often framed through humor or resilience. Sentiment: Negative with positive resolve (e.g., 65% of Estonians “ready to fight”). Engagement spikes above 200 likes.
3) Costs, Inflation, and Big Projects
OCTA price hikes, Rail Baltica debates, EU policy complaints — economic pressure remains a daily frustration. Users critique affordability but also imagine pragmatic fixes (shadow-economy reforms, digitalization). Sentiment: Negative–mixed (~15% of native posts; ~120 likes/post).
4) Nostalgia and Cultural Roots
Posts on Riga markets, Lithuanian Catholic festivals, and Estonian Kalevipoeg myths formed a softer cultural layer. Humor and melancholy merge in everyday reflections about “how the Baltics used to be.” Sentiment: Positive–mixed (~10% of posts; 100+ likes).
5) Youth and Education Debates
Esports nominations, school reforms, teacher-citizenship debates, digital-learning perks — youth-oriented topics trended mid-week. Sentiment: Positive with critical notes (~10% of posts; viral among parents).
Russian-Language Baltic Trends
1) Ukraine Solidarity
High-engagement Russian-language posts strongly align with Baltic support for Ukraine: donations, drone funding, symbolic actions. Sentiment: Positive (40% of RU-language posts; 200+ likes).
2) Language Mandates as Tension
Frustrations with Latvian/Lithuanian language requirements dominate RU-language debates, mixed with calls for empathy and dialogue. Sentiment: Negative–mixed (25% of posts; heated threads ~150 likes).
3) Migration & Urban Nostalgia
Stories of selling apartments, moving abroad, or missing the “old Riga/Vilnius” continue to trend. Sentiment: Mixed (20% of posts; ~100 likes).
4) Hybrid Threat Anxiety
Speculation on sabotage behind the Vilnius crash and border incidents remains present. Sentiment: Negative (10% of posts; ~120 likes).
5) Cultural Positives
Festivals, markets, community events — a small but consistent positive layer. Sentiment: Positive (5% of posts; ~80 likes).
🇪🇪🇱🇻🇱🇹 Baltic GDP Pulse — Q3 2025
Baltic Focus tracks macroeconomic shifts across the region.
🇪🇪 ESTONIA
GDP: +0.9% y/y (unchanged from Q2), €10.5bn in current prices.
Quarterly growth: +0.4% (seasonally adjusted).
Drivers:
Manufacturing +7.9% (best since 2021), energy +21.5%, real estate +4.4%.
– Wholesale & retail −6.9%, transport & storage −6.9%.
Household consumption fell 0.6%, investment slightly down (−0.7%).
Exports grew 5.7%, imports 5.6%, keeping net export positive.
🇱🇹 LITHUANIA
GDP: +2.0% y/y (seasonally adjusted).
Quarterly growth: −0.02% vs Q2 — essentially flat.
Current-price GDP: €22.2bn.
Production-side:
– Negative impact: manufacturing, transportation & storage.
Positive: wholesale & retail, professional & technical services, administrative services.
Expenditure-side vs Q2:
• Household consumption −0.7%
• Government consumption −0.2%
• Investment +1.2%
• Exports −1.2%, imports +0.1%
YTD: GDP Jan–Sep 2025: €61.7bn, growth +2.8% y/y.
🇱🇻 LATVIA
GDP: +2.5% y/y, €11.2bn in Q3 (current prices).
Quarterly growth: +0.6%.
Production-side highlights:
Manufacturing +7.3%, with strong gains in food production +10.7% and wood products +9.2%.
Construction +9.0%, driven by infrastructure (+21.9%).
Retail +1.3%, hospitality +4.9%, ICT +2.6%.
– Deep declines: mining −24.2%, forestry −6.4%, information services −8.9%.
Demand-side:
• Household consumption +1.8%
• Government consumption +5.8%
• Investment +10.8% (notably machinery & equipment +15.2%)
• Exports +3.0%, imports +5.8%
Wages rose +6.5% overall.
🧭 Baltic Context — Why This Matters
The Baltic economies finally show synchronized stabilization:
Manufacturing rebounds across all three states — a first since 2022.
Household consumption remains weak in Estonia and Lithuania, but improves in Latvia.
Construction and infrastructure are now a region-wide growth engine.
Trade flows remain positive in Estonia and Latvia; Lithuania experiences a temporary dip.
Across the region, growth is positive y/y, but quarterly dynamics suggest a fragile recovery.
This is the clearest sign yet that Baltic economies have bottomed out and are entering a slow but broad recovery phase heading into 2026.#BalticFocus #Baltics #GDP #Economy
#Estonia #Latvia #Lithuania
#Macroeconomics #Growth #Trade #Industry BSM@Baltic Focus
Baltic Focus tracks macroeconomic shifts across the region.
🇪🇪 ESTONIA
GDP: +0.9% y/y (unchanged from Q2), €10.5bn in current prices.
Quarterly growth: +0.4% (seasonally adjusted).
Drivers:
Manufacturing +7.9% (best since 2021), energy +21.5%, real estate +4.4%.
– Wholesale & retail −6.9%, transport & storage −6.9%.
Household consumption fell 0.6%, investment slightly down (−0.7%).
Exports grew 5.7%, imports 5.6%, keeping net export positive.
🇱🇹 LITHUANIA
GDP: +2.0% y/y (seasonally adjusted).
Quarterly growth: −0.02% vs Q2 — essentially flat.
Current-price GDP: €22.2bn.
Production-side:
– Negative impact: manufacturing, transportation & storage.
Positive: wholesale & retail, professional & technical services, administrative services.
Expenditure-side vs Q2:
• Household consumption −0.7%
• Government consumption −0.2%
• Investment +1.2%
• Exports −1.2%, imports +0.1%
YTD: GDP Jan–Sep 2025: €61.7bn, growth +2.8% y/y.
🇱🇻 LATVIA
GDP: +2.5% y/y, €11.2bn in Q3 (current prices).
Quarterly growth: +0.6%.
Production-side highlights:
Manufacturing +7.3%, with strong gains in food production +10.7% and wood products +9.2%.
Construction +9.0%, driven by infrastructure (+21.9%).
Retail +1.3%, hospitality +4.9%, ICT +2.6%.
– Deep declines: mining −24.2%, forestry −6.4%, information services −8.9%.
Demand-side:
• Household consumption +1.8%
• Government consumption +5.8%
• Investment +10.8% (notably machinery & equipment +15.2%)
• Exports +3.0%, imports +5.8%
Wages rose +6.5% overall.
🧭 Baltic Context — Why This Matters
The Baltic economies finally show synchronized stabilization:
Manufacturing rebounds across all three states — a first since 2022.
Household consumption remains weak in Estonia and Lithuania, but improves in Latvia.
Construction and infrastructure are now a region-wide growth engine.
Trade flows remain positive in Estonia and Latvia; Lithuania experiences a temporary dip.
Across the region, growth is positive y/y, but quarterly dynamics suggest a fragile recovery.
This is the clearest sign yet that Baltic economies have bottomed out and are entering a slow but broad recovery phase heading into 2026.#BalticFocus #Baltics #GDP #Economy
#Estonia #Latvia #Lithuania
#Macroeconomics #Growth #Trade #Industry BSM@Baltic Focus
🇪🇪🇱🇻🇱🇹 Baltic Wages Pulse — Q3 2025
The Baltic wage map continues to diverge in 2025 — but this quarter comes with an important methodological twist.
🇱🇹 Lithuania — the highest wages in the Baltics
Average gross wage reached €2,427 (+8.5% y/y, Q3).
Real earnings also rose (+3.8%).
Growth is broad and sector-wide.
🇪🇪 Estonia — slowing momentum
Average gross wage: €2,075 (+5.9% y/y, Q3).
ICT, finance and energy remain the highest-paying sectors, but overall growth has cooled.
🇱🇻 Latvia — latest available data is for Q2 (not Q3)
This is unusual: Latvia released Q2 wage data only on 1 December, a much later date than in previous years.
Average gross wage for Q2 was €1,808 (+8.2% y/y), with Riga region reaching €1,980, the closest Latvia has ever been to the €2,000 mark.
Net wages grew faster than inflation, but full-time equivalent employment continued to fall.
🔎 Regional signal
For the first time in several years, the Baltics show a three-speed wage landscape:
• Lithuania accelerating at the top,
• Estonia decelerating,
• Latvia stable but with delayed publication and a shrinking labour force.
This divergence will shape consumption patterns, labour mobility and tax revenues across the region in 2026.#BalticFocus #Baltics #Wages #LabourMarket #Economy BSM@Baltic Focus
The Baltic wage map continues to diverge in 2025 — but this quarter comes with an important methodological twist.
🇱🇹 Lithuania — the highest wages in the Baltics
Average gross wage reached €2,427 (+8.5% y/y, Q3).
Real earnings also rose (+3.8%).
Growth is broad and sector-wide.
🇪🇪 Estonia — slowing momentum
Average gross wage: €2,075 (+5.9% y/y, Q3).
ICT, finance and energy remain the highest-paying sectors, but overall growth has cooled.
🇱🇻 Latvia — latest available data is for Q2 (not Q3)
This is unusual: Latvia released Q2 wage data only on 1 December, a much later date than in previous years.
Average gross wage for Q2 was €1,808 (+8.2% y/y), with Riga region reaching €1,980, the closest Latvia has ever been to the €2,000 mark.
Net wages grew faster than inflation, but full-time equivalent employment continued to fall.
🔎 Regional signal
For the first time in several years, the Baltics show a three-speed wage landscape:
• Lithuania accelerating at the top,
• Estonia decelerating,
• Latvia stable but with delayed publication and a shrinking labour force.
This divergence will shape consumption patterns, labour mobility and tax revenues across the region in 2026.#BalticFocus #Baltics #Wages #LabourMarket #Economy BSM@Baltic Focus
MUST-HAVE BALTIC SIGNAL — Estonia secures 1036 MW for grid-island operation
Elering and Enefit Power have signed a key agreement to guarantee Estonia’s ability to operate as an electrical island if connections to neighbouring grids are lost.
This is one of the most important strategic steps in the Baltic energy transition ahead of full desynchronisation from the Russia–Belarus grid.
Key facts
• 1036 MW of controllable capacity secured
• Maximum annual cost: €59.5 million
• Financed through the new security-of-supply fee on consumer bills starting 2026
• Cost for an average household: ~€2.35/month (incl. VAT)
Why it matters
Estonia’s controllable generation currently comes 85% from Enefit Power plants (Eesti, Balti, Auvere).
The agreement ensures these units remain operational until new modern capacity is built, providing a buffer against:
long, windless cold periods
temporary isolation from Continental Europe’s frequency zone
volatility on Nordic electricity markets
Market design note
The scheme is cost-based and audited.
If Enefit Power earns more revenue on energy markets than projected, the compensation decreases, reducing consumer costs.
Regional perspective
With the Baltics preparing for full synchronous operation with Continental Europe, island-operation capability is not optional — it is a core resilience requirement.
This move positions Estonia as one of the best-prepared energy systems in the region.
BSM © 2025 | balticfocus.org #balticfocus
Elering and Enefit Power have signed a key agreement to guarantee Estonia’s ability to operate as an electrical island if connections to neighbouring grids are lost.
This is one of the most important strategic steps in the Baltic energy transition ahead of full desynchronisation from the Russia–Belarus grid.
Key facts
• 1036 MW of controllable capacity secured
• Maximum annual cost: €59.5 million
• Financed through the new security-of-supply fee on consumer bills starting 2026
• Cost for an average household: ~€2.35/month (incl. VAT)
Why it matters
Estonia’s controllable generation currently comes 85% from Enefit Power plants (Eesti, Balti, Auvere).
The agreement ensures these units remain operational until new modern capacity is built, providing a buffer against:
long, windless cold periods
temporary isolation from Continental Europe’s frequency zone
volatility on Nordic electricity markets
Market design note
The scheme is cost-based and audited.
If Enefit Power earns more revenue on energy markets than projected, the compensation decreases, reducing consumer costs.
Regional perspective
With the Baltics preparing for full synchronous operation with Continental Europe, island-operation capability is not optional — it is a core resilience requirement.
This move positions Estonia as one of the best-prepared energy systems in the region.
BSM © 2025 | balticfocus.org #balticfocus
⭐️ SOCIAL RADAR BRIEF — Expert Signal and Regional Context
1. The RAND comment that triggered an unusually strong public reaction
A recent interview with Colin Smith, Senior International and Defense Researcher at RAND Corporation, published by LETA, became one of the most amplified topics of the week.
Smith suggested that Latvia should “consider dismantling sections of broad-gauge railway lines” as part of long-term defense planning.
Who is Colin Smith?
• 25 years of U.S. military service
• Assignments in Moscow and Riga
• Former Deputy Director of CAPSTONE (NDU) — a strategic-level course for new generals and admirals
• At RAND: logistics, infrastructure survivability, international security
Important: Smith did not participate in RAND’s 2014–2016 Baltic war-game models — although those studies significantly increased RAND’s regional activity and funding, according to public annual reports.
2. Low-probability scenarios amplified into the political mainstream
RAND’s own open-source assessments classify such extreme scenarios as low-probability (≈5–12%).
However, several Latvian media outlets presented Smith’s comments as concrete recommendations for immediate infrastructure changes.
This generated an unusually fast escalation:
• amplified by major Latvian outlets
• raised by MPs
• discussed at the President’s Military Council
An analytical “what-if” scenario evolved into a political narrative much larger than intended.
3. Realistic timeline: any legislative action shifts to late 2026
Even if adopted politically, practical implementation cannot begin before summer–autumn 2026 due to:
• parliamentary recess,
• expected change of both parliament and government.
Any real legislation would fall under the next Saeima.
4. Parallel rise of international philanthropic activism in Latvia
At the same time, Latvia experienced intensified animal-welfare activism, supported by large international foundations working in global-risk, ethics, and food-systems.
This included:
• protests near the Saeima,
• extensive media coverage,
• a draft law that could make Latvia’s egg sector economically non-competitive.
No causal link is implied — but the timing strengthened the sense of external agendas entering domestic debates.
5. Estonia simultaneously strengthened its focus on Kazakh grain transit
During President Alar Karis’ visit to Astana, Estonia discussed:
• expanding Kazakh grain exports through Estonian ports,
• developing new logistics capacity,
• broader economic cooperation.
As a result, strategic corridors and infrastructure became central themes in both Latvia and Estonia — though for different reasons.
6. Overall Social Radar signal
Autumn 2025 shows an unusual regional synchrony:
• an external expert signal amplified into national politics
• rapid public uptake of low-probability scenarios
• heightened visibility of international philanthropic actors
• Estonia’s parallel actions to reshape transit flows
• infrastructure and corridor security becoming shared Baltic themes
No coordination is suggested —
but the Baltic information space has clearly become more sensitive to global narratives, external expertise, and transnational activism, all emerging at the same time.BDW © 2025 | balticfocus.org
#BalticFocus #SocialRadar #BalticSecurity #RegionalContext #NATORegion
1. The RAND comment that triggered an unusually strong public reaction
A recent interview with Colin Smith, Senior International and Defense Researcher at RAND Corporation, published by LETA, became one of the most amplified topics of the week.
Smith suggested that Latvia should “consider dismantling sections of broad-gauge railway lines” as part of long-term defense planning.
Who is Colin Smith?
• 25 years of U.S. military service
• Assignments in Moscow and Riga
• Former Deputy Director of CAPSTONE (NDU) — a strategic-level course for new generals and admirals
• At RAND: logistics, infrastructure survivability, international security
Important: Smith did not participate in RAND’s 2014–2016 Baltic war-game models — although those studies significantly increased RAND’s regional activity and funding, according to public annual reports.
2. Low-probability scenarios amplified into the political mainstream
RAND’s own open-source assessments classify such extreme scenarios as low-probability (≈5–12%).
However, several Latvian media outlets presented Smith’s comments as concrete recommendations for immediate infrastructure changes.
This generated an unusually fast escalation:
• amplified by major Latvian outlets
• raised by MPs
• discussed at the President’s Military Council
An analytical “what-if” scenario evolved into a political narrative much larger than intended.
3. Realistic timeline: any legislative action shifts to late 2026
Even if adopted politically, practical implementation cannot begin before summer–autumn 2026 due to:
• parliamentary recess,
• expected change of both parliament and government.
Any real legislation would fall under the next Saeima.
4. Parallel rise of international philanthropic activism in Latvia
At the same time, Latvia experienced intensified animal-welfare activism, supported by large international foundations working in global-risk, ethics, and food-systems.
This included:
• protests near the Saeima,
• extensive media coverage,
• a draft law that could make Latvia’s egg sector economically non-competitive.
No causal link is implied — but the timing strengthened the sense of external agendas entering domestic debates.
5. Estonia simultaneously strengthened its focus on Kazakh grain transit
During President Alar Karis’ visit to Astana, Estonia discussed:
• expanding Kazakh grain exports through Estonian ports,
• developing new logistics capacity,
• broader economic cooperation.
As a result, strategic corridors and infrastructure became central themes in both Latvia and Estonia — though for different reasons.
6. Overall Social Radar signal
Autumn 2025 shows an unusual regional synchrony:
• an external expert signal amplified into national politics
• rapid public uptake of low-probability scenarios
• heightened visibility of international philanthropic actors
• Estonia’s parallel actions to reshape transit flows
• infrastructure and corridor security becoming shared Baltic themes
No coordination is suggested —
but the Baltic information space has clearly become more sensitive to global narratives, external expertise, and transnational activism, all emerging at the same time.BDW © 2025 | balticfocus.org
#BalticFocus #SocialRadar #BalticSecurity #RegionalContext #NATORegion
Fokker Next Gen Latvia: What Was Promised, What Happened, and Why the Project Quietly Ended
News trigger: Latvia’s much-publicised hydrogen aircraft project is being liquidated
On 1 December 2025, the Latvian Business Register recorded the start of liquidation proceedings for SIA “Fokker Next Gen Latvia” — the company that, since early 2024, had been promoted as the future producer of Europe’s first liquid-hydrogen passenger aircraft.
The project generated significant attention in 2023–2024:
plans for a 120–150-seat hydrogen aircraft,
a proposed manufacturing line in Liepāja,
cooperation with RTU,
up to 100 new jobs,
a government memorandum,
and months of positive media coverage positioning it as a major innovation breakthrough for Latvia.
By late 2025, instead of aircraft assembly or engineering hires, the only development was the liquidation notice.
This raised the obvious question: what actually happened?
What Latvia was told to expect
According to LIAA materials, government statements and Fokker’s own communications (2023–2024), the project was framed as a major strategic investment:
a next-generation hydrogen aircraft with 120–150 seats,
a flight range of up to 2,500 km,
up to 100 new jobs in the first three years,
academic cooperation with RTU,
production and maintenance facilities in Liepāja,
and, in later media reports, even long-term potential for up to 800 jobs.
For Latvia, this was marketed as an entry into the green aviation industry — a rare opportunity for a region without an aerospace manufacturing base.
What the Latvian company really looked like
Public records (Firmas.lv) for Fokker Next Gen Latvia show a very different picture:
registered 16 February 2024,
share capital: €2,800,
employees: 1,
revenue: 0,
fixed assets: €3,944,
administrative expenses: ~€135,000.
These expenses were not operational losses — the company conducted no activity.
They were typical startup administrative costs (legal services, accounting, consultancy, internal project preparation), most of which likely flowed back to the Dutch parent through intra-group invoicing.
In other words, the Latvian entity was a project vehicle, not a factory.
Meanwhile in the Netherlands: the real project direction emerged
While Latvia was presenting the project as a future industrial anchor, developments in the Netherlands showed where Fokker’s actual priorities lay.
Groningen MoU (30 September 2024)
Fokker Next Gen signed a memorandum with the Northern Netherlands (Groningen Airport Eelde, regional authorities, educational and hydrogen infrastructure partners).
The document outlined:
a possible headquarters location,
a final assembly line (FAL) for the hydrogen aircraft,
integration with the Netherlands’ hydrogen ecosystem,
training pipelines and R&D clusters.
Latvia still appeared in this narrative — but now only as a “production line” somewhere in the wider hydrogen value chain, not the central site.
Partnership with ASL Aviation
Testing, certification and development activities gravitated toward the NL/BE aerospace environment.
By 2025, Latvia vanished from Fokker’s public communications
No news of engineers hired, no land secured in Liepāja, no procurement, no infrastructure preparation.
All visible momentum shifted toward the Dutch cluster.
Why the Latvian project never started
Several structural factors made the advertised plan unrealistic:
1) Latvia lacks an aerospace manufacturing ecosystem
No certification bodies, no hydrogen aircraft testbeds, no specialist suppliers, no engineering schools in this field.
Building a large commercial aircraft in such an environment was never viable.
2) Latvia helped Fokker strengthen its EU funding profile
In EU programmes like Clean Aviation and Horizon Europe, cross-border presence and cohesion-state participation increase project evaluation scores.
A Latvian SPV offered:
geographic expansion,
political endorsement,
positive PR in multiple Member States,
stronger optics for grant applications.( Continuation in Part 2 (next post))
News trigger: Latvia’s much-publicised hydrogen aircraft project is being liquidated
On 1 December 2025, the Latvian Business Register recorded the start of liquidation proceedings for SIA “Fokker Next Gen Latvia” — the company that, since early 2024, had been promoted as the future producer of Europe’s first liquid-hydrogen passenger aircraft.
The project generated significant attention in 2023–2024:
plans for a 120–150-seat hydrogen aircraft,
a proposed manufacturing line in Liepāja,
cooperation with RTU,
up to 100 new jobs,
a government memorandum,
and months of positive media coverage positioning it as a major innovation breakthrough for Latvia.
By late 2025, instead of aircraft assembly or engineering hires, the only development was the liquidation notice.
This raised the obvious question: what actually happened?
What Latvia was told to expect
According to LIAA materials, government statements and Fokker’s own communications (2023–2024), the project was framed as a major strategic investment:
a next-generation hydrogen aircraft with 120–150 seats,
a flight range of up to 2,500 km,
up to 100 new jobs in the first three years,
academic cooperation with RTU,
production and maintenance facilities in Liepāja,
and, in later media reports, even long-term potential for up to 800 jobs.
For Latvia, this was marketed as an entry into the green aviation industry — a rare opportunity for a region without an aerospace manufacturing base.
What the Latvian company really looked like
Public records (Firmas.lv) for Fokker Next Gen Latvia show a very different picture:
registered 16 February 2024,
share capital: €2,800,
employees: 1,
revenue: 0,
fixed assets: €3,944,
administrative expenses: ~€135,000.
These expenses were not operational losses — the company conducted no activity.
They were typical startup administrative costs (legal services, accounting, consultancy, internal project preparation), most of which likely flowed back to the Dutch parent through intra-group invoicing.
In other words, the Latvian entity was a project vehicle, not a factory.
Meanwhile in the Netherlands: the real project direction emerged
While Latvia was presenting the project as a future industrial anchor, developments in the Netherlands showed where Fokker’s actual priorities lay.
Groningen MoU (30 September 2024)
Fokker Next Gen signed a memorandum with the Northern Netherlands (Groningen Airport Eelde, regional authorities, educational and hydrogen infrastructure partners).
The document outlined:
a possible headquarters location,
a final assembly line (FAL) for the hydrogen aircraft,
integration with the Netherlands’ hydrogen ecosystem,
training pipelines and R&D clusters.
Latvia still appeared in this narrative — but now only as a “production line” somewhere in the wider hydrogen value chain, not the central site.
Partnership with ASL Aviation
Testing, certification and development activities gravitated toward the NL/BE aerospace environment.
By 2025, Latvia vanished from Fokker’s public communications
No news of engineers hired, no land secured in Liepāja, no procurement, no infrastructure preparation.
All visible momentum shifted toward the Dutch cluster.
Why the Latvian project never started
Several structural factors made the advertised plan unrealistic:
1) Latvia lacks an aerospace manufacturing ecosystem
No certification bodies, no hydrogen aircraft testbeds, no specialist suppliers, no engineering schools in this field.
Building a large commercial aircraft in such an environment was never viable.
2) Latvia helped Fokker strengthen its EU funding profile
In EU programmes like Clean Aviation and Horizon Europe, cross-border presence and cohesion-state participation increase project evaluation scores.
A Latvian SPV offered:
geographic expansion,
political endorsement,
positive PR in multiple Member States,
stronger optics for grant applications.( Continuation in Part 2 (next post))
3) The project in Latvia existed mainly on paper
Signs:
minimal capital,
no equipment,
no team,
no physical preparation.
The project lived in presentations, not in engineering space.
About the €135k: not a loss, but internal billing
The widely reported €135k in expenses represents:
legal services,
accounting,
consultancy,
project documentation,
intra-group management fees.
These are typical costs for a non-operational SPV.
Economically, the money likely returned to the parent company.
Latvia did not lose budget funds — but it also did not gain anything tangible.
Why Latvia was left with an empty shell
Because the country provided:
political visibility,
a new jurisdiction for PR,
a narrative of expansion into Eastern EU,
and improved European optics for Fokker’s applications…
…but received no industrial activity, no assets, no jobs, no ecosystem development.
Latvia functioned as a booster for a larger project that ultimately located itself in the Netherlands.
What this case shows systemically
MoUs are not investments.
A memorandum without capital, staff or procurement is a political gesture, not the start of a factory.
A €2,800 SPV cannot anchor an aerospace project.
The basic numbers already indicated low commitment.
High-tech projects go where ecosystems exist.
The Netherlands has hydrogen infrastructure, suppliers, and certification partners; Latvia does not.
Small states are often used as “funding enhancers”.
Cohesion countries improve EU project scores — but are not always part of the real industrial plan.
What Latvia can learn from this
1. Require material commitments before public promotion
Capital, staffing, equipment — not just a press release.
2. Tie MoUs to concrete deliverables and deadlines
If no progress is made within 12–18 months, the “strategic project” status should lapse.
3. Use technical due diligence from local experts
RTU, LMT, SAF Tehnika and others can assess feasibility early on.
4. Build on sectors where Latvia has real industrial strength
ICT, drones, sensors, cybersecurity, materials, agritech — not heavy aerospace manufacturing.
Conclusion
The liquidation of Fokker Next Gen Latvia is not a scandal — it is a predictable outcome of a project that never progressed beyond the PR stage.
Fokker consolidated its efforts in the Netherlands, where the ecosystem, funding access and technical capacity truly exist.
Latvia, meanwhile, served as a symbolic extension point — useful for European optics, but never intended as the core of the programme.
The key lesson is simple:
Announced projects are not real projects until capital, staff and infrastructure appear.
Latvia did not suffer financial losses — but it did lose time, expectations and part of its credibility in the innovation narrative.#BalticFocus #BSM2025 #BalticSignals #RegionalAnalysis
Signs:
minimal capital,
no equipment,
no team,
no physical preparation.
The project lived in presentations, not in engineering space.
About the €135k: not a loss, but internal billing
The widely reported €135k in expenses represents:
legal services,
accounting,
consultancy,
project documentation,
intra-group management fees.
These are typical costs for a non-operational SPV.
Economically, the money likely returned to the parent company.
Latvia did not lose budget funds — but it also did not gain anything tangible.
Why Latvia was left with an empty shell
Because the country provided:
political visibility,
a new jurisdiction for PR,
a narrative of expansion into Eastern EU,
and improved European optics for Fokker’s applications…
…but received no industrial activity, no assets, no jobs, no ecosystem development.
Latvia functioned as a booster for a larger project that ultimately located itself in the Netherlands.
What this case shows systemically
MoUs are not investments.
A memorandum without capital, staff or procurement is a political gesture, not the start of a factory.
A €2,800 SPV cannot anchor an aerospace project.
The basic numbers already indicated low commitment.
High-tech projects go where ecosystems exist.
The Netherlands has hydrogen infrastructure, suppliers, and certification partners; Latvia does not.
Small states are often used as “funding enhancers”.
Cohesion countries improve EU project scores — but are not always part of the real industrial plan.
What Latvia can learn from this
1. Require material commitments before public promotion
Capital, staffing, equipment — not just a press release.
2. Tie MoUs to concrete deliverables and deadlines
If no progress is made within 12–18 months, the “strategic project” status should lapse.
3. Use technical due diligence from local experts
RTU, LMT, SAF Tehnika and others can assess feasibility early on.
4. Build on sectors where Latvia has real industrial strength
ICT, drones, sensors, cybersecurity, materials, agritech — not heavy aerospace manufacturing.
Conclusion
The liquidation of Fokker Next Gen Latvia is not a scandal — it is a predictable outcome of a project that never progressed beyond the PR stage.
Fokker consolidated its efforts in the Netherlands, where the ecosystem, funding access and technical capacity truly exist.
Latvia, meanwhile, served as a symbolic extension point — useful for European optics, but never intended as the core of the programme.
The key lesson is simple:
Announced projects are not real projects until capital, staff and infrastructure appear.
Latvia did not suffer financial losses — but it did lose time, expectations and part of its credibility in the innovation narrative.#BalticFocus #BSM2025 #BalticSignals #RegionalAnalysis
⭐️ airBaltic: Fitch downgrade, a new Airbus delivery — and a financial structure that leaves no room for illusions
Fitch’s decision to cut airBaltic’s rating to CCC+ marks a turning point that markets anticipated, but policymakers did not.
The downgrade signals one thing very clearly: the airline will require substantial external financing within the next 12 months. Not for growth — for liquidity.
1) A new Airbus A220-300 delivered the very next day
The arrival of the 51st A220-300 looks like a success milestone, but analysts read it differently:
the airline continues to absorb expensive long-term commitments at a time when its own capital base is under strain.
These deliveries are not optional — they are contractual. airBaltic cannot simply “pause” them without political or legal consequences.
Result: the fleet grows, while the balance sheet weakens.
2) A structure that has become risky
airBaltic now depends on three reinforcing pressure points:
Expensive debt: outstanding bonds with a 14.5% coupon — not market-rate financing but a distressed instrument from the moment of issuance.
ACMI dependence: a meaningful part of the fleet operates not in the Latvian market but for Lufthansa under wet-lease agreements. This provides revenue but reduces strategic autonomy and makes airBaltic a capacity provider rather than a market shaper.
Aircraft delivery schedule: Airbus contracts leave little room for maneuver — commitments must be honoured even when liquidity is tight.
3) Market chatter: €180–220 million needed
Fitch mentions €180 million in capital needs, but informal market estimates reach €220+ million.
Reasons:
ongoing engine issues related to PW1500G;
recurring aircraft downtime;
operating costs rising faster than revenue;
nine-month 2025 cash flow slightly positive but insufficient to service debt and cover future deliveries.
4) IPO in 2026: now off the table
A CCC+ rating effectively closes the IPO window.
To restart investor discussions, the airline would need:
lower leverage,
stable profitability,
positive free cash flow,
a clear and credible fleet-financing model.
None of these conditions is met today.
5) What comes next? Three realistic scenarios
A new capital injection by the Latvian state and Lufthansa to stabilise liquidity.
Restructuring of part of the debt and/or aircraft financing schedule.
Further expansion of ACMI operations, pushing airBaltic toward a Baltic capacity-provider model rather than a full-scale national carrier.
⭐️ Conclusion
airBaltic is not “in crisis” — it is already in a post-crisis correction phase, where liquidity, contractual inertia, and fleet obligations dictate more than strategy.
Fitch’s downgrade simply formalises what markets have understood for months:
without a significant capital injection, airBaltic will become financially unstable in the near term.#airBaltic
#A220
#FitchRatings
#CreditRisk
#AviationFinance #BSM2025
Fitch’s decision to cut airBaltic’s rating to CCC+ marks a turning point that markets anticipated, but policymakers did not.
The downgrade signals one thing very clearly: the airline will require substantial external financing within the next 12 months. Not for growth — for liquidity.
1) A new Airbus A220-300 delivered the very next day
The arrival of the 51st A220-300 looks like a success milestone, but analysts read it differently:
the airline continues to absorb expensive long-term commitments at a time when its own capital base is under strain.
These deliveries are not optional — they are contractual. airBaltic cannot simply “pause” them without political or legal consequences.
Result: the fleet grows, while the balance sheet weakens.
2) A structure that has become risky
airBaltic now depends on three reinforcing pressure points:
Expensive debt: outstanding bonds with a 14.5% coupon — not market-rate financing but a distressed instrument from the moment of issuance.
ACMI dependence: a meaningful part of the fleet operates not in the Latvian market but for Lufthansa under wet-lease agreements. This provides revenue but reduces strategic autonomy and makes airBaltic a capacity provider rather than a market shaper.
Aircraft delivery schedule: Airbus contracts leave little room for maneuver — commitments must be honoured even when liquidity is tight.
3) Market chatter: €180–220 million needed
Fitch mentions €180 million in capital needs, but informal market estimates reach €220+ million.
Reasons:
ongoing engine issues related to PW1500G;
recurring aircraft downtime;
operating costs rising faster than revenue;
nine-month 2025 cash flow slightly positive but insufficient to service debt and cover future deliveries.
4) IPO in 2026: now off the table
A CCC+ rating effectively closes the IPO window.
To restart investor discussions, the airline would need:
lower leverage,
stable profitability,
positive free cash flow,
a clear and credible fleet-financing model.
None of these conditions is met today.
5) What comes next? Three realistic scenarios
A new capital injection by the Latvian state and Lufthansa to stabilise liquidity.
Restructuring of part of the debt and/or aircraft financing schedule.
Further expansion of ACMI operations, pushing airBaltic toward a Baltic capacity-provider model rather than a full-scale national carrier.
⭐️ Conclusion
airBaltic is not “in crisis” — it is already in a post-crisis correction phase, where liquidity, contractual inertia, and fleet obligations dictate more than strategy.
Fitch’s downgrade simply formalises what markets have understood for months:
without a significant capital injection, airBaltic will become financially unstable in the near term.#airBaltic
#A220
#FitchRatings
#CreditRisk
#AviationFinance #BSM2025
Baltic Focus · Agriculture & Food Industry Signal
Maag Food opens Estonia’s largest poultry halls in Lääne-Virumaa
Estonian food producer Maag Food has opened the country’s largest poultry facilities in Uudeküla, Tapa municipality. Each hall is 120 meters long, 30 meters wide, cost a total of €5 million, and will soon receive their first chicks — expected in ten days.
Both halls can house 60,000 birds each, with annual throughput exceeding one million broiler chickens. Maag owns key Estonian brands, including Rakvere and Tallegg, and plans to use operational insights from Uudeküla to optimise its next major project: a new poultry facility scheduled to open in Kiltsi in two years.
The two halls are intentionally built with different configurations to compare technology performance — from adjustable lighting systems that influence animal cycles to alternative heating and radiator setups. “Next year we’ll see which solutions work best,” the company noted during the opening.
Local government response has been supportive. Tapa municipality leader Riho Tell said residents did not oppose the project:
“People here are used to agricultural production — historically this area housed the Põdrangu state farm goose sheds. Rural life comes with smells and sounds.”
CONTEXT:
The investment signals continued consolidation and modernisation of Estonia’s poultry sector. As the country reduces reliance on imports and raises standards in food security, large-scale, tech-driven farms like Uudeküla play a growing strategic role.
BSM © 2025 | balticfocus.org
#balticfocus
Maag Food opens Estonia’s largest poultry halls in Lääne-Virumaa
Estonian food producer Maag Food has opened the country’s largest poultry facilities in Uudeküla, Tapa municipality. Each hall is 120 meters long, 30 meters wide, cost a total of €5 million, and will soon receive their first chicks — expected in ten days.
Both halls can house 60,000 birds each, with annual throughput exceeding one million broiler chickens. Maag owns key Estonian brands, including Rakvere and Tallegg, and plans to use operational insights from Uudeküla to optimise its next major project: a new poultry facility scheduled to open in Kiltsi in two years.
The two halls are intentionally built with different configurations to compare technology performance — from adjustable lighting systems that influence animal cycles to alternative heating and radiator setups. “Next year we’ll see which solutions work best,” the company noted during the opening.
Local government response has been supportive. Tapa municipality leader Riho Tell said residents did not oppose the project:
“People here are used to agricultural production — historically this area housed the Põdrangu state farm goose sheds. Rural life comes with smells and sounds.”
CONTEXT:
The investment signals continued consolidation and modernisation of Estonia’s poultry sector. As the country reduces reliance on imports and raises standards in food security, large-scale, tech-driven farms like Uudeküla play a growing strategic role.
BSM © 2025 | balticfocus.org
#balticfocus
Storent raises €16.5M — a strong signal for Baltic capital markets
Latvia’s equipment rental company Storent Holding has successfully completed its public bond offer, raising €16.5M — the full target amount. Demand remained solid throughout the process: €13.3M during subscription and another €3.2M through bond swaps. In total 1,200+ investors participated, and Storent’s overall investor base now exceeds 5,000 people.
The structure once again reflects the typical Baltic pattern:
• 74% of investment volume from Latvia
• 20% from Lithuania
• 6% from Estonia
Retail investors made up 85% of total demand — and all orders were allocated in full.
The company will direct €11.4M to refinancing, with the remaining capital supporting Storent’s expansion in the Baltics, the Nordics and the US. Storent will now apply for listing on Nasdaq Riga.
Context: This is the second major autumn signal highlighting the strength of Baltic retail-driven capital markets. Local investors continue to dominate regional financing — and Storent is one of the clearest examples of this trend.
BDW © 2025 | balticfocus.org
#balticfocus
Latvia’s equipment rental company Storent Holding has successfully completed its public bond offer, raising €16.5M — the full target amount. Demand remained solid throughout the process: €13.3M during subscription and another €3.2M through bond swaps. In total 1,200+ investors participated, and Storent’s overall investor base now exceeds 5,000 people.
The structure once again reflects the typical Baltic pattern:
• 74% of investment volume from Latvia
• 20% from Lithuania
• 6% from Estonia
Retail investors made up 85% of total demand — and all orders were allocated in full.
The company will direct €11.4M to refinancing, with the remaining capital supporting Storent’s expansion in the Baltics, the Nordics and the US. Storent will now apply for listing on Nasdaq Riga.
Context: This is the second major autumn signal highlighting the strength of Baltic retail-driven capital markets. Local investors continue to dominate regional financing — and Storent is one of the clearest examples of this trend.
BDW © 2025 | balticfocus.org
#balticfocus
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🇱🇹🇱🇻 Deal Signal | Latvia’s Global Champs acquires Lithuania’s Baltic Champs
Latvia’s family-owned Global Champs has signed a preliminary agreement to acquire Baltic Champs, the mushroom-growing subsidiary of Lithuania’s AUGA Group.
The sale is part of AUGA’s restructuring plan and will reduce its debt burden by almost €5 million.
Context: this deal is a rare reversal of regional capital flows. Over the past decade, Lithuanian companies have been the main buyers of Latvian assets — not the other way around. The transaction highlights both financial pressure on Lithuania’s agribusiness sector and a stronger role for Latvian private capital in cross-border acquisitions.
Sector outlook: Latvia’s mushroom cultivation industry is small. Public registries list around 15 officially active producers; including specialised brands, the realistic range is 15–20 enterprises. The industrial core consists of only 7–9 farms, with the rest operating on a small or micro scale. BSM © 2025 | balticfocus.org
#balticfocus
Latvia’s family-owned Global Champs has signed a preliminary agreement to acquire Baltic Champs, the mushroom-growing subsidiary of Lithuania’s AUGA Group.
The sale is part of AUGA’s restructuring plan and will reduce its debt burden by almost €5 million.
Context: this deal is a rare reversal of regional capital flows. Over the past decade, Lithuanian companies have been the main buyers of Latvian assets — not the other way around. The transaction highlights both financial pressure on Lithuania’s agribusiness sector and a stronger role for Latvian private capital in cross-border acquisitions.
Sector outlook: Latvia’s mushroom cultivation industry is small. Public registries list around 15 officially active producers; including specialised brands, the realistic range is 15–20 enterprises. The industrial core consists of only 7–9 farms, with the rest operating on a small or micro scale. BSM © 2025 | balticfocus.org
#balticfocus
🇱🇻 Wildlife Signal | Latvia ends roe deer season with 19,868 animals culled
Latvia’s forestry service reports 19,868 roe deer culled this season — well below the 35,000 taken in seasons before limits were removed, and still short of the 30,000–40,000 needed to stabilise the national population (~202,000 animals).
Context: Latvia has no legal commercial market for game meat, so most venison remains inside hunting collectives through private distribution. The main concern is structure, not volume: 56% of this year’s cull were bucks, far above the recommended 35–40%. #Latvia #WildlifeManagement #Biodiversity #Forestry
Latvia’s forestry service reports 19,868 roe deer culled this season — well below the 35,000 taken in seasons before limits were removed, and still short of the 30,000–40,000 needed to stabilise the national population (~202,000 animals).
Context: Latvia has no legal commercial market for game meat, so most venison remains inside hunting collectives through private distribution. The main concern is structure, not volume: 56% of this year’s cull were bucks, far above the recommended 35–40%. #Latvia #WildlifeManagement #Biodiversity #Forestry
🇱🇻 Latvia Transport Signal | Ventspils grows against national trend
Latvian ports handled 25.5 mln t in Jan–Sep (–1.9%), but Ventspils is moving in the opposite direction: +14.7%, totalling 6.5 mln t.
Growth came across key segments — oil products (+39%), Ro-Ro (+22%) and Kazakhstan coal (+60%). Liquid cargo increase is driven by higher oil-product imports handled through the Ventspils terminal system.
Ventspils has also opened a unique corridor for 100-metre heavy-haul convoys, now used for large renewable-energy components.
Ventspils remains the only major port expanding, supported by liquid cargo and oversize logistics.
🔗 X-version: https://x.com/BalticFocus/status/1997054094146727959
BSM © 2025 | balticfocus.org
#Latvia #Ventspils #Ports #Logistics
Latvian ports handled 25.5 mln t in Jan–Sep (–1.9%), but Ventspils is moving in the opposite direction: +14.7%, totalling 6.5 mln t.
Growth came across key segments — oil products (+39%), Ro-Ro (+22%) and Kazakhstan coal (+60%). Liquid cargo increase is driven by higher oil-product imports handled through the Ventspils terminal system.
Ventspils has also opened a unique corridor for 100-metre heavy-haul convoys, now used for large renewable-energy components.
Ventspils remains the only major port expanding, supported by liquid cargo and oversize logistics.
🔗 X-version: https://x.com/BalticFocus/status/1997054094146727959
BSM © 2025 | balticfocus.org
#Latvia #Ventspils #Ports #Logistics
🇱🇻🇱🇹🇪🇪 Baltic Grocery Index — Week of 6 December
Latvia –1.8%
Prices eased on poultry and pork, while vegetables remained stable. Latvia holds a mid-range position in the region.
Lithuania –0.9%
Lower egg prices and stable meat keep Lithuania the cheapest basket in the Baltics. Core essentials remain consistently below LV and EE levels.
Estonia +0.6%
Higher pork and egg prices lifted the weekly basket, despite cheaper oil and milk. Estonia remains the most expensive market overall.
Baltic trend:
Lithuania leads on affordability, Latvia stays balanced, while Estonia faces the strongest price pressure in protein categories. Rice remains the sharpest divergence — EE levels are still 2–2.5× below LV and LT.
Baltic Shift Map © 2025 | balticfocus.org
Latvia –1.8%
Prices eased on poultry and pork, while vegetables remained stable. Latvia holds a mid-range position in the region.
Lithuania –0.9%
Lower egg prices and stable meat keep Lithuania the cheapest basket in the Baltics. Core essentials remain consistently below LV and EE levels.
Estonia +0.6%
Higher pork and egg prices lifted the weekly basket, despite cheaper oil and milk. Estonia remains the most expensive market overall.
Baltic trend:
Lithuania leads on affordability, Latvia stays balanced, while Estonia faces the strongest price pressure in protein categories. Rice remains the sharpest divergence — EE levels are still 2–2.5× below LV and LT.
Baltic Shift Map © 2025 | balticfocus.org
🇱🇻 LATVIA — Basket –1.8% WoW
Milk 0.75
Bread 0.39
Eggs (10) 2.29
Chicken fillet (kg) 6.99
Pork shoulder (kg) 5.69
Potatoes (kg) 0.49
Carrots (kg) 0.65
Sunflower oil 1L 1.99
Rice 800g 1.19
Sugar 1kg 0.75
Latvia remains a mid-range market: stable vegetables, easing meat prices.
🇱🇹 LITHUANIA — Basket –0.9% WoW
Milk 0.62–0.65
Bread 0.79
Eggs (10) 2.15
Chicken fillet (kg) 7.29–8.49
Pork shoulder (kg) 5.59
Potatoes (kg) 0.49*
Carrots (kg) 0.65*
Sunflower oil 1L 1.54
Rice 800g 0.95
Sugar 1kg 0.89
*Last available baseline price (product out of stock at week end).
Lithuania keeps the cheapest basket in the Baltics, driven by protein categories.
🇪🇪 ESTONIA — Basket +0.6% WoW
Milk 0.59
Bread 0.43
Eggs (10) 2.75
Chicken fillet (kg) 6.58
Pork shoulder (kg) 9.29
Potatoes (kg) 0.39
Carrots (kg) 0.45
Sunflower oil 1L 1.59
Rice 800g 0.49
Sugar 1kg 0.73
Estonia remains the most expensive market, with pork and eggs driving the weekly increase.
🔎 Baltic Trend
• Lithuania is the most affordable — protein prices remain the lowest.
• Latvia is stable — mid-range basket with minor declines.
• Estonia is the most expensive — strong upward pressure in pork and eggs.
• Rice shows the widest divergence: EE prices are still 2–2.5× below LV and LT. Baltic Shift Map © 2025 | balticfocus.org
Milk 0.75
Bread 0.39
Eggs (10) 2.29
Chicken fillet (kg) 6.99
Pork shoulder (kg) 5.69
Potatoes (kg) 0.49
Carrots (kg) 0.65
Sunflower oil 1L 1.99
Rice 800g 1.19
Sugar 1kg 0.75
Latvia remains a mid-range market: stable vegetables, easing meat prices.
🇱🇹 LITHUANIA — Basket –0.9% WoW
Milk 0.62–0.65
Bread 0.79
Eggs (10) 2.15
Chicken fillet (kg) 7.29–8.49
Pork shoulder (kg) 5.59
Potatoes (kg) 0.49*
Carrots (kg) 0.65*
Sunflower oil 1L 1.54
Rice 800g 0.95
Sugar 1kg 0.89
*Last available baseline price (product out of stock at week end).
Lithuania keeps the cheapest basket in the Baltics, driven by protein categories.
🇪🇪 ESTONIA — Basket +0.6% WoW
Milk 0.59
Bread 0.43
Eggs (10) 2.75
Chicken fillet (kg) 6.58
Pork shoulder (kg) 9.29
Potatoes (kg) 0.39
Carrots (kg) 0.45
Sunflower oil 1L 1.59
Rice 800g 0.49
Sugar 1kg 0.73
Estonia remains the most expensive market, with pork and eggs driving the weekly increase.
🔎 Baltic Trend
• Lithuania is the most affordable — protein prices remain the lowest.
• Latvia is stable — mid-range basket with minor declines.
• Estonia is the most expensive — strong upward pressure in pork and eggs.
• Rice shows the widest divergence: EE prices are still 2–2.5× below LV and LT. Baltic Shift Map © 2025 | balticfocus.org