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EBRD confirms commitment to Latvia
Bank adopts new strategy
Latvia has been rewarded for a strong commitment to reform with high growth
rates over the past years. The economy grew by 8.3 per cent in 2004, and has
averaged annual growth of 7.5 per cent since 2000. The impact of EU accession
has been positive in terms of trade and investment. Latvia was admitted to the
European Exchange Rate Mechanism (ERM II) in May, further aligning the economy
with the Eurozone.
Despite significant progress challenges persist as the EBRD states in its
latest strategy for Latvia, now available on www.ebrd.com.
The Bank remains committed to support Latvia in its efforts to overcome key
challenges such as:
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Private sector participation in the municipal and transport sectors remains
limited despite extensive investment needs. Energy efficiency is a concern
especially as Latvia remains reliant on imported fuel and power.
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Further improvements in the business environment are needed, including more
extensive and consistent enforcement of laws and reduction in corruption.
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Financial institutions need to ensure that the risk of money laundering is
eliminated and that they all operate according to international best practice.
Financial intermediation remains low, particularly to small and medium-sized
enterprises and there is a lack of equity and mezzanine capital.
To address these challenges the EBRD, which has invested €950 million in
Latvia to date, will:
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Support complex transactions that would benefit from the Bank’s expertise in
project structuring, corporate governance and mobilising co-financing;
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Support the expansion of local companies, particularly on cross-border
projects;
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Promote SME and municipal financing and energy efficiency;
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Encourage the development of local capital markets, for example in investing
in the local securitisation of mortgage loans.
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