AGP Executive Report

Financial Services: Kraken parent Payward has agreed to buy Saldo Finance, owner of Lithuania-licensed Saldo Bank. Pending regulatory approval, the deal—expected to close in 2027—would give Payward an EU banking license and a route into deposits, lending and euro payments across several markets. Aerospace: Canadian firm Volatus Aerospace plans to acquire Vilnius-based AISPECO, a maker of airborne sensor systems and flight-management software, expanding its defence and aerial-intelligence business. Defence Industry: Lithuania and Ukraine discussed joint weapons production, while Lithuania is also seeking closer aerospace and defence cooperation with Airbus.

Aerospace & Defence: Canadian firm Volatus Aerospace has agreed to acquire Vilnius-based AISPECO, adding its airborne sensors and flight-management software to Volatus’ defence and aerial-intelligence business. Lithuania is also seeking closer ties with Airbus, including opportunities for local firms in its supply chain, aircraft maintenance, advanced manufacturing and counter-drone technology. Trade & Investment: Lithuania and Sri Lanka have agreed to deepen business and technology links, with renewable energy, logistics and digital technology among the areas discussed. Separate talks with Kazakhstan focused on investment and opportunities for Lithuanian companies along the Trans-Caspian transport route. Transport Links: Germany’s €1 million contribution brings the Ukraine Transport Support Fund to €4.1 million; Lithuania’s Central Project Management Agency will handle procurement for equipment and infrastructure needs. Rail Baltica’s main line is around 40% under construction, with its backers seeking long-term EU funding to finish the project. Financial Services: Crypto exchange Kraken’s parent, Payward, plans to buy a European bank. Lithuania has been reported as a possible target, but the company has not confirmed it.

Offshore Wind Supply Chain: Lithuania’s Hampidjan Baltic will manufacture heavy-lifting slings for Cadeler’s Wind Ace vessel, supporting construction of the 960 MW East Anglia TWO wind farm. Vilnius Tech: Web-data firms including Oxylabs have joined the new Source group, which says rising demand for AI-ready data is driving expansion and research investment. Telecoms Jobs: Telia plans to cut about 110 jobs in Lithuania as part of 900 reductions across its markets, citing efficiency and restructuring. Economic Outlook: The IMF forecasts Lithuania’s economy will grow 2.7% in 2026, the fastest rate among the Baltic states, while inflation is projected at 5.4%. Transport Links: Rail Baltica’s completion is now targeted for 2034, though construction of Tallinn’s Ülemiste terminal is continuing toward a 2028 opening.

AI and Data: Vilnius-based Oxylabs has joined four web-intelligence firms under Source, a group valued at $3.6 billion after a Warburg Pincus-led funding round. The companies report a sharp rise in demand for AI-ready data. Economic Outlook: The IMF expects Lithuania’s economy to grow 2.7% in 2026, the fastest rate in the Baltics, while inflation is forecast at 5.4%. Telecoms: Telia plans to cut 110 jobs in Lithuania as part of 900 cuts across its markets by year-end, citing efficiency and a greater focus on local operations. Advanced Manufacturing: A Lithuanian femtosecond-laser maker is looking to scale production to meet rising demand for medical applications.

Industrial Policy: EU environment ministers debated changes to the emissions trading system, weighing climate targets against industrial competitiveness and the risk of production shifting abroad. High-Tech Cooperation: Lithuania’s economy minister is in Italy seeking joint projects in defence, AI, cybersecurity, space technology and counter-drone systems. Drone Investment: Lithuanian-Danish firm Monopulse raised more than €2 million to develop drones designed to operate despite electronic jamming; its systems are already used by Lithuanian and Danish armed forces. Telecoms: Telia plans to cut 900 jobs across its Nordic and Baltic markets by year-end, including Lithuania, as it targets annual savings of about $100 million. Consumer Technology: Lithuania’s telecom regulator has begun testing mobile phones for specific absorption rates, checking compliance with EU limits.

High-Tech Partnerships: Economy Minister Edvinas Grikšas is visiting Italy to pursue joint projects in defence, AI, cybersecurity, space and counter-drone technology, with meetings planned with government and Leonardo representatives. Telecom Jobs: Telia plans about 900 job cuts across its markets by year-end, with staff in Lithuania among those affected; it has not disclosed the local figure. Product Standards: Lithuania’s telecom regulator has begun testing phones in Kaunas for specific absorption rates, checking compliance with EU limits. Industrial Scale-Up: A Lithuanian maker of femtosecond lasers is betting on production growth as the technology finds new medical uses. Energy Infrastructure: Lithuania and Poland have agreed arrangements for the Harmony Link connection, a key step in strengthening regional electricity links. Agricultural Trade: Lithuania is pressing the EU to ban Russian grain transit, alongside Latvia and Estonia, and tighten controls on grain origins.

Manufacturing: Latvia’s Amber Latvijas balzams may face insolvency proceedings after sales fell sharply and its tax debt topped €28 million. The company has moved part of its production to Lithuania, where it now makes the brand’s champagne. Agriculture & Trade: Lithuania is pressing the EU to ban Russian grain transit, arguing that Russia should not profit from EU routes while attacking Ukraine’s export infrastructure. Energy Infrastructure: Lithuania and Poland have agreed arrangements for the Harmony Link connection, an important step in the cross-border power project. Industry & Jobs: Business groups warn that tighter foreign-worker restrictions could weigh on Lithuania’s growth, while a Lithuanian laser maker is betting on expanded production to meet demand. Pharmaceuticals: Grindeks Kalceks received a “Strongest in Lithuania 2026” recognition for financial reliability and responsible business practices.

Agriculture: Lithuania is pressing the EU to ban Russian grain transit, with Latvia and Estonia backing the move. Their joint proposal also seeks to stop exports of grain taken from occupied Ukrainian territory and strengthen routes for Ukrainian shipments. Defence Manufacturing: Lithuania has started a Leopard 2A8 assembly plant, adding a new defence-production capability as the country builds up its military. Energy Infrastructure: Lithuania and Poland have agreed arrangements for the Harmony Link connection, marking a further step in the cross-border project. Pharmaceuticals: Grindeks Kalceks, the Lithuanian subsidiary of Latvia’s Grindeks, received a “Strongest in Lithuania 2026” award recognising its financial reliability and business practices.

Energy & Infrastructure: Lithuania and Poland have agreed arrangements for the Harmony Link power connection, while Lithuania has secured half the biofuel needed for the heating season. Trade & Agriculture: Vilnius plans to press the EU to ban Russian grain transit through European ports and infrastructure, arguing Moscow should not profit from exports while attacking Ukraine’s trade routes. Industrial Capacity: Lithuania has begun Leopard 2A8 assembly, adding a defence-manufacturing project as local business groups warn that tighter foreign-worker restrictions could weigh on economic growth. Payments: Baltic central bankers discussed the digital euro in Vilnius, with Estonia’s deputy governor arguing it could make payments more resilient during crises.

Critical Minerals: The EU selected 46 strategic projects across 16 member states, including Lithuania, to develop extraction, processing and recycling of materials needed for batteries, defence and aerospace. More than €2 billion in public funding is available. Energy Links: Lithuania and Poland agreed on connection and testing arrangements for Harmony Link, a planned interconnector expected to support electricity trade and the use of Lithuania’s growing renewable output. Business Pressures: Business groups warn that tighter foreign-worker rules could weigh on Lithuania’s growth, while inflation climbed to 6.7%, its highest level since July 2023. Industrial Investment: Lithuania has started a Leopard 2A8 assembly plant and a local laser maker is scaling up to meet medical demand. The country has also secured half the biofuel needed for the coming heating season.

Critical Minerals: The European Commission selected 46 strategic raw-materials projects across 16 EU countries, including Lithuania, covering extraction, processing and recycling. The new portfolio spans 15 of the bloc’s 17 priority materials, with more than €2 billion in public funding available. Grain Trade: Lithuania plans to propose an EU ban on Russian grain transiting European ports and infrastructure, alongside sanctions on Russian agricultural oligarchs. Vilnius is also tightening checks on grain origins to prevent Ukrainian grain stolen from occupied territory entering supply chains. Trade and Investment: Lithuania and Sri Lanka agreed to regular political consultations during a visit marking 30 years of diplomatic ties, with discussions spanning trade, investment and digital cooperation. Energy Links: Litgrid and Poland’s PSE signed an agreement setting out how they will connect and test the 220kV Harmony Link interconnector. Construction in Lithuania is planned for 2027, with the link targeted to enter service by the end of 2030.

Energy Infrastructure: Lithuania and Poland have agreed on connection arrangements for the 220kV Harmony Link, with construction in Lithuania planned from 2027 and commissioning targeted by the end of 2030. Trade & Agriculture: Lithuania plans tighter checks on Russian grain and will propose an EU transit ban, a move with implications for Baltic logistics and grain operators. Manufacturing: Lithuania is moving ahead with a Leopard 2A8 assembly plant; a local laser maker is also scaling up to meet medical demand, while Amber Latvijas balzams is shifting some production to Lithuania. Business Climate: Inflation reached 6.7%, and business groups warn that curbs on foreign workers could weigh on economic growth. Lithuania has also secured half the biofuel needed for the coming heating season.

Grain Trade: Lithuania plans to push for an EU ban on Russian grain transit and tighter checks on grain origins, while reviewing services provided by companies involved in exports. Investment Links: Bangladesh has invited Lithuanian firms into agro-processing, renewable energy, IT, cybersecurity and waste management; the two countries also agreed to regular consultations and stronger business ties. Costs and Labour: Lithuania’s annual inflation rose to 6.7% in September, led by transport costs up 20.2% and housing and utilities up 15.9%. Business groups warn that curbs on foreign workers could also constrain growth. Energy Supply: Lithuania has secured half the biofuel needed for the coming heating season.

Prices and Costs: Lithuania’s inflation rose to 6.7% in September, its highest since July 2023, driven by transport costs up 20.2% and housing and utilities up 15.9%. Business and Jobs: Industry groups warn that tighter foreign-worker limits could curb growth; foreign nationals contributed 45% of GDP growth from 2019 to 2024, according to figures cited by the Lithuanian Confederation of Industrialists. Wood Processing: Reporting says Lithuanian-owned VMG’s Belarusian SWOODS plant was sold to a Russian company after Belarus had barred foreign shareholders from transferring listed businesses; the plant was later removed from that list. Energy Supply: Lithuania has secured half the biofuel needed for the fourth quarter, while state forests plan to supply up to 1.827 million cubic metres of feedstock this year. Vilnius Investment: Gaming supplier ICONIC21 has opened offices in the capital and plans to create more than 350 jobs.

Workforce: Lithuanian business groups warn that tighter foreign-worker rules could slow growth; foreign nationals accounted for 45% of GDP growth from 2019 to 2024, according to Bank of Lithuania figures. Vilnius Investment: Gaming supplier ICONIC21 plans more than 350 local jobs as it builds a European operations hub in the capital. Defence Industry: Lithuania has received its first Switchblade 600 loitering munitions, while defence firm UDS has set up a Ukrainian venture to work with local military units and technology partners. Heating Fuel: Lithuania has secured half the biofuel needed for the fourth quarter, with state forests set to supply up to 1.827 million cubic metres of feedstock this year. Advanced Manufacturing: Laser maker LITILIT is betting on growing medical demand after research found its femtosecond imaging can assess lung tumour margins in under six minutes. Energy Storage: European Energy has opened a 25 MW/65 MWh battery at its Anykščiai solar park, its first storage project in the Baltics.

Medical Manufacturing: Lithuanian laser maker LITILIT is betting on scale as femtosecond lasers gain new medical uses. A study found the technology assessed lung tumour margins in under six minutes, compared with 36 minutes using the standard method. Defence Production: Lithuania has started a Leopard 2A8 assembly plant, adding to the country’s defence-industrial capacity. Manufacturing Investment: Amber Latvijas balzams is moving some production to Lithuania, a boost to local manufacturing. Energy Infrastructure: Amber Grid has signed a contract for the Nordic-Baltic Hydrogen Corridor, advancing plans for cross-border hydrogen links. Agriculture: Foreign workers are becoming more vital to Lithuania’s agri-sector, highlighting the workforce needs behind food production.