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Riga, Latvia – Kafijas Banka, a leading coffee producer in the Baltic region, roasted over 3.168 million kilograms of coffee in 2025, solidifying its position as a modern and rapidly growing force in the industry. Founded thirteen years ago with a focus on delivering a premium coffee experience, the company has expanded from a tiny operation to a major player serving both business-to-business (B2B) clients and individual consumers.

The company’s origins, according to founder Artis Grigo, were rooted in a desire to offer more than just a beverage. “Kafijas Banka arose as a place where quality and innovation meet. We wanted to ensure that every cup of coffee delivers the best possible experience,” Grigo stated. This commitment extends to sourcing, with the company prioritizing sustainability, reliability, and ethical production practices. Each batch of beans undergoes rigorous testing and tasting to meet the company’s standards.

Kafijas Banka’s core brands, PUPA and the Kafijas Banka Gold series, have become synonymous with quality and taste throughout the Baltics. The company currently serves large retail chains such as Maxima and DEPO, develops private label products, and exports to 16 countries. Maintaining consistent quality and stable supply chains while experiencing rapid growth presents a significant challenge, Grigo acknowledged. “Success lies in combining high standards with flexibility, responding to market demands. It’s precisely attention to detail that allows us to maintain customer trust – whether it’s an international retailer or a small local office.”

Approximately 35-40% of Kafijas Banka’s sales now occur online, a trend that continues to grow as customers value convenience, and speed. The company has also invested in its logistical capabilities, partnering with Venipak to ensure swift delivery of freshly roasted coffee. For a company shipping around 8,000 kg of coffee annually through Venipak, delivery speed is critical, Grigo explained. “We were looking for a partner with a high level of customer service and reliable order fulfillment. Venipak stood out with convenient IT integration and fast express deliveries.”

Looking ahead to 2026, Kafijas Banka plans to strengthen its connection with the local community by opening “coffee studios” – interactive spaces where consumers can learn about coffee preparation methods and experience the brand firsthand. The company also aims to expand its export volumes and solidify its presence in foreign markets. “Along with growth in the local market, our ambitions remain international. The goal is to expand export volumes and strengthen our presence in foreign markets. We believe that by combining technical precision with a high-quality product, People can successfully compete on a global scale,” Grigo said.

Kafijas Banka is also unique in the Baltics for its in-house metal packaging production, offering premium and sustainable packaging solutions for both industrial and consumer clients, according to information from Kafijas Banka’s website.

Latvia’s transmission system operator, AS “Augstsprieguma tīkls” (AST), invested €182.85 million in 2025 in the development of its electricity transmission network, strengthening energy supply security and the availability of transmission services. A significant portion, €90.84 million, was allocated to projects related to synchronization with the European grid, according to recently published unaudited reports for 2025.

The investment also included €16.7 million for the reconstruction and modernization of substations and transmission lines, and €51.07 million for the creation of connections for new solar and wind power plants, as well as battery energy storage systems (BESS), financed by developers.

“In 2025, we implemented significant measures related to energy independence and security – the synchronization of the Baltic energy grid with Europe. All infrastructure projects related to synchronization, worth more than €90 million, have been completed,” stated AST Chairman of the Board Rolands Irklis. “We have also strengthened cybersecurity and built new connections to the transmission network for the integration of renewable resources.”

AST’s profit increased from €14.76 million in 2024 to €17.75 million in 2025, largely due to dividends received from its subsidiary, “Conexus Baltic Grid,” totaling €13.34 million. Net turnover reached €264.26 million, including €94.19 million from electricity transmission network services, a 0.6% increase compared to 2024. The volume of electricity transmitted to Latvian consumers increased by 1.7% in 2025, reaching 6,118 GWh.

The Public Utilities Regulatory Commission (SPRK) has authorized AST to use accumulated revenue from congestion management for covering transmission system service costs, up to €62.1 million by the end of 2025. In 2025, €45.45 million was used for this purpose, including for balancing capacity.

Looking ahead, SPRK has approved AST’s electricity transmission tariffs for the next three years, starting in 2026, ensuring tariff competitiveness in the Baltic states and long-term stability. Tariff reductions vary by user group, with household users experiencing no change in transmission costs.

AST has concluded 31 agreements for connecting renewable energy power plants to the transmission network, with a total reserved capacity of almost 3000 megawatts (MW). Five new substations were completed in 2025 to facilitate these connections: “Marientāle” in Rēzeknes municipality, “Vārme” in Kuldīgas municipality, “Nīzere” and “Rūtiņi” in Bauskas municipality, and “Bāliņi” in Krāslavas municipality. Four additional connections were established at existing substations – “Tārgale”, “Rīgas TEC-2”, “Brocēni” and “Krustpils”.

AST also continued work on new interconnections with neighboring electricity transmission systems, including an environmental impact assessment for a new 330 kV transmission line “Ventspils–Brocēni–Varduva” and preparatory studies for the construction of a fourth Latvia-Estonia interconnection using a submarine cable.

The company’s subsidiary, “Conexus Baltic Grid,” reported revenue of €48.25 million in its natural gas transmission segment in 2025, with a profit before corporate income tax of €6.62 million, a 66% increase compared to the previous year, largely attributed to asset revaluation in 2024. However, revenue in the natural gas storage segment decreased by 31% due to reduced capacity reservations.

AST Group’s net turnover in 2025 was €354.08 million (compared to €258.61 million in 2024), and net profit increased from €22.67 million in 2024 to €27.51 million in 2025. The AST Group consists of AST and its subsidiary, “Conexus Baltic Grid,” in which AST owns 68.46% of the shares.

The Indexo Real Estate Fund, managed by Provendi Asset Management, has nearly quadrupled its assets under management in two years, reaching 176 million euros, according to a statement released by Provendi Asset Management.

The fund’s asset value has grown from 48 million euros at the end of 2023, driven by a series of strategic investments in Baltic commercial properties. “We are pleased to have achieved rapid and stable fund growth in such a short time, based on a targeted investment strategy and active portfolio management,” said Kristaps Bērziņš, Chairman of the Board of Provendi Asset Management. “Over the past 18 months, we have completed five new real estate investment transactions and simultaneously improved the performance of existing assets, which has allowed all portfolio properties to present revenue growth.”

Several key deals in 2025 contributed to this expansion. In Latvia, the fund added the “Olimpia” and “Damme” shopping centers to its portfolio, whereas in Estonia, the acquisition of the “Auriga” shopping center in Kuressaare broadened its regional presence. The acquisition of “Olimpia” was recognized with a Baltic Real Estate Leaders Forum (BREL) award in the “Deal of the Year” category. According to Colliers Baltic data, the acquisitions of “Olimpia” and “Damme” placed the fund among the top three largest real estate investment deals in the Baltics in 2025.

Financial indicators also demonstrate the fund’s success. In 2025, the Indexo Real Estate Fund’s Net Operating Income (NOI) reached approximately 9.6 million euros, with a projected amount exceeding 13 million euros for 2026. This reflects both portfolio growth and efficient property management, according to Provendi Asset Management.

Provendi Asset Management aims to increase the fund’s assets under management by approximately 100 million euros each year, with plans to surpass the 200 million euro mark in the near future. The long-term goal is to achieve a portfolio of around 500 million euros within a few years. The fund intends to maintain its focus on cash flow-generating properties in the retail sector, while also evaluating opportunities to expand into the office and logistics sectors, and further develop its presence in Estonia and Lithuania.

The fund is also considering a potential initial public offering (IPO) in the future, citing its growth, predictable cash flow, and dividend policy as factors that would support a successful offering. Preparatory work is underway to assess the fund’s readiness for this next phase of growth.

In July 2025, Provendi Asset Management completed a deal to acquire an office and commercial space building in central Riga, valued at over 4 million euros, demonstrating a continued commitment to the development of Riga’s historic center. The firm also strengthened the management of four properties in Latvia, implementing changes to improve efficiency and service quality, according to a statement released by Provendi Asset Management.

Latvia faces a growing risk of losing economic competitiveness as wage growth significantly outpaces productivity gains, according to a modern economic barometer report released by the Productivity Science Institute of the University of Latvia’s LV PEAK research center. The findings, published on February 11, 2026, indicate a widening gap between labor costs and output, a trend experts warn could undermine the nation’s economic standing.

The report highlights that labor costs in 2025 have substantially exceeded pre-pandemic levels, while productivity increases have been moderate. LV PEAK Director Professor Inna Šteinbuka emphasized that productivity is a key driver of competitiveness. “Latvia’s productivity in 2025 is estimated to be around 55% of the EU average,” she stated, adding that even across Europe, productivity growth is sluggish.

Šteinbuka noted that Latvian productivity has remained stagnant in recent years, hovering between 54% and 55% of the EU average regardless of domestic economic policies. She explained that a previous statistical correction had temporarily shown a higher productivity figure, nearing 60% of the EU average, but the current assessment reflects a more accurate picture. Two primary factors are contributing to the decline in competitiveness: an unfavorable exchange rate, with Latvia exceeding the acceptable range due to high inflation and a nominal labor cost index that significantly surpasses recommended limits.

The Economic Barometer reveals a moderate economic growth since 2022, with average annual productivity increases of only 0.2%. In 2025, productivity experienced a moderately positive trend, reaching a level 2.9% higher than the previous year during the first three quarters. While this represents a faster rate of productivity growth than the EU average, it hasn’t been enough to close the substantial gap with EU benchmarks. Economic slowdowns, evidenced by negative IKP growth, have not significantly impacted the momentum of rising labor costs.

From 2021 to 2024, labor costs increased by almost 1.3 times, averaging 9.7% annually. Unit labor costs (ULC) rose by 31.6% over the same period, driven by the slow pace of productivity growth. A notable exception occurred in 2021, when a productivity increase of 8.3% mitigated some of the pressure from rising labor costs, resulting in a 0.7% decrease in ULC.

LV PEAK experts point to a continuing trend in 2025, where labor costs significantly outstripped productivity gains. During the first three quarters of the year, labor costs increased by 8.5%, nearly three times faster than the productivity increase of 5.4%, leading to a 5.4% rise in ULC. This surge in labor costs is attributed to unfavorable demographic trends, increasing demand, and intense competition in open EU labor markets.

“Increasing productivity is the only way to counteract the growing cost pressures on competitiveness,” Šteinbuka stressed. The institute believes that future productivity growth will increasingly rely on knowledge-intensive activities, which currently represent a small portion of the Latvian economy. Latvia’s primary weakness lies in innovation – specifically, insufficient investment in research and development, as well as a lack of skilled labor. Although, policymakers must similarly address long-standing issues such as infrastructure deficiencies, regional disparities, and social inequality to foster a comprehensive approach to productivity and competitiveness enhancement.