A Single Development Financial Institution Was Created
15 April 2015
Today, on 15 April, three institutions providing aid in the form of financial instruments, i.e. “Latvian Development Financial Institution Altum” (ALTUM), “Latvian Guarantee Agency” (LGA) and “Rural Development Fund” (RDF), were merged into a single institution.
Thus, the process of creation of a single development financial institution has ended. The name of the new institution is JSC “Latvian Development Financial Institution Altum”. All shares of the single institution belong to the Latvian State; shareholders are the Ministry of Finance, Ministry of Economics and Ministry of Agriculture of the Republic of Latvia. State aid in the form of financial instruments (guarantees, loans, venture capital, etc.) previously provided by three separate institutions will be further ensured by the single financial institution.
The single institution takes over all the rights and obligations of ALTUM, LGA and RDF; it will continue implementing all previous ALTUM, LGA and RDF state aid programmes. Cooperation with clients will be ensured according to previous procedures, using the existing ALTUM’s regional client service network, within the framework of which it will be possible to receive information on all services and state aid programmes previously maintained by ALTUM, LGA and RDF. Clients have been informed about the creation of the single development financial institution in personally addressed letters.
Rolands Paņko, Chairman of the Board at “Latvian Development Financial Institution Altum”:
“Almost half-a-year long process of restructuring of four companies has finished, ending the years long process of creating a single development financial institution. During the entire process, the continuity of state aid programmes was ensured. The merger of institutions providing state aid to businesses into one organisation will ensure the availability of state aid programmes and prevent fragmentation of aid instruments. By combining experience and resources, as well as concentrating them in a single place, clients will get more available aid correspondent to their needs, while the state — more effective management of aid instruments. It was decided to use one of the previous brands of the group of companies providing state aid, i.e. ALTUM, for the new merged institution.
At the moment of creation of the single development financial institution, its portfolio of state aid instruments amounted to approximately 390 million euros. The institution will provide aid both directly and indirectly via financial intermediaries. Cooperation with commercial banks within the framework of guarantees and housing guarantees is already being successfully implemented; venture capital investments and other types of indirect aid are implemented.
In 2015, it is planned to commence implementing several new state aid programmes, for example, programme of multi-apartment building insulation, programme of crisis loans and guarantees, programme of medium- and long-term export guarantees and investments in venture capital; the Land Fund will commence its operation as well. Areas of activity in future will include business development, energy efficiency, agriculture and support to certain groups of persons (for example, housing guarantees for families with children, crisis programme, etc.).
This year, ALTUM organises an international business and finance conference that will be devoted to innovative business and the availability of European Union financial instruments and will be an important event within the framework of the Latvian Presidency in deciding on the investment policy of Europe at the highest level.