The European Bank for Reconstruction and Development (EBRD) has deepened its partnership with Estonia, Latvia, and Lithuania to accelerate the development of a unified pan-Baltic capital market. The renewed cooperation aims to strengthen regional financial integration, attract greater international investment, and support long-term economic growth across the Baltic region.
The partnership was formalized through a new Memorandum of Understanding (MoU) signed during the EBRD’s 2026 Annual Meeting in Riga. The agreement outlines a shared commitment to addressing remaining barriers to market integration and advancing the region’s capital markets toward achieving Emerging Market status under the MSCI index classification.
A stronger and more integrated pan-Baltic capital market is expected to improve access to funding for businesses, broaden investment opportunities for domestic and international investors, and enhance the overall competitiveness of the region’s financial sector. Achieving MSCI Emerging Market status could significantly increase investor interest and capital inflows into Estonia, Latvia, and Lithuania.
The Baltic states have been working closely with the EBRD since 2017 to build a more connected regional capital market. This collaboration has already delivered several important milestones, including the introduction of common frameworks for covered bonds and commercial paper, as well as the creation of a single MSCI Frontier Markets classification for the region in 2023.
Under the new agreement, the EBRD and Baltic governments will focus on expanding the investor base by attracting both retail and institutional investors from domestic and international markets. Efforts will also be directed toward encouraging greater cross-border financial activity and developing innovative financial instruments that can support market growth.
Another key priority is improving access to finance for businesses of all sizes, from small and medium-sized enterprises to large corporations. By promoting capital market development and increasing the number of listed companies, the initiative aims to create more funding opportunities and strengthen the region’s business environment.
The partnership will also explore cross-border investment solutions, including thematic investment funds targeting strategic sectors such as green energy, technology, and infrastructure. These sectors are viewed as critical drivers of future economic development and sustainability in the Baltic region.
Supporting local capital market development remains one of the EBRD’s core strategic priorities in the Baltic states. Through enhanced cooperation and continued financial sector reforms, the region is positioning itself to become a more attractive destination for global investors while strengthening economic resilience and fostering sustainable growth.
The renewed partnership marks an important step toward creating a deeper, more liquid, and internationally competitive capital market that can support the evolving needs of businesses and investors across Estonia, Latvia, and Lithuania.
