Latvenergo management urges freedom to invest and considers a share offering
At a strategic forum, the management of state-owned energy company Latvenergo said that without investment in development the company will lose competitiveness. It names a public offering of part of its shares, with the state keeping control, as one possible solution.
The management of Latvenergo, Latvia's state-owned energy company, and industry experts said at a strategic forum the company recently organised that the firm could fall behind competitors without investment in development. The company expects electricity demand in Europe to grow in the coming years, driven by the power needs of artificial intelligence, but says it can only seize the new opportunities if it has funds to invest. Whether capital may be raised on the stock market is a decision for politicians.
Security as an investment
Latvenergo board member Ilvija Boreiko said physical and cyber resilience is a key issue in the current geopolitical situation. In her view, security is no longer merely a cost but an investment that lets a country remain strategically independent. Ieva Ilvesa, adviser to Ukraine's Minister of Digital Transformation, told the forum that in Ukraine a smartphone combines about 30 documents, and roughly 250,000 claims for damage caused by air strikes have been filed remotely.
The IPO idea
Latvenergo chairman Mārtiņš Čakste believes one way to attract funds is an initial public offering (IPO), in which a company's shares are offered to investors on the stock exchange for the first time. According to him, the state would keep control while residents could also become shareholders. Čakste claims that if the company is allowed to invest, it could add ten billion euros to Latvia's GDP over ten years. The step requires a political decision; in 2000, after a signature drive against privatisation, the Saeima, Latvia's parliament, had already decided the company was not to be privatised.
Neighbours' experience
Shares of Finland's state-owned energy group Fortum have been listed since 1998, with the state keeping a 51 percent controlling stake. The company expanded significantly, but had to write off its assets in Russia after the 2022 invasion of Ukraine. In Estonia, shares of Eesti Energia's subsidiary Enefit Green were offered publicly in 2022 but later bought back, because balancing the interests of parent and subsidiary proved difficult. Lithuania's Ignitis raised 450 million euros in 2020 by offering 30 percent of its shares, with the state keeping about 70 percent.
