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WE ARE REDUCING DISTANCES!1

2Latvia in Brief64 000 square kmPopulation- 2.0 millionGDP- 22.08 billion EUR (2012)Transport and Communications sector builds 12% of GDP (2012)Currency- EURMember of the EU and NATO since 2004 and the WTO since 19983 major ice-free ports and 7 small ports4 special economic zonesLatvia

3Freeport of Riga in 2013Biggest port in the Baltic States by cargo turnover (35.47 mln.t)Multifunctional port with cargo handling capacity 55 mln.t/yearGrowth by cargo segments: dry bulk (-0.3%), general cargo (+2.0%), liquid bulk (-8.5 %)New record in passenger traffic: 837 thous. passengers (+2.8%), including 66.9 thous. of cruise passengers (-19.4%)Business Cardwww.rop.lv

4Freeport of Riga in 2013Business Cardwww.rop.lvPort enterprises account for 5 000 direct jobs and up to 15 000 of indirect working places in related industries (railways, forwarding, agencies, trucking, etc.)Financial results (2012): Total net revenues EUR 572 mln; net profits EUR 34 mln; total assets EUR 613 mlnAccounting period (2012) taxes payable to the State and Municipal budgets EUR 37.6 mlnInvestments during 2012 in port infrastructure- EUR 20.6 mln

5Freeport of Riga- 11% of the City TerritoryBusiness CardPort border line Railway - - -Main roads LegendTotal port area6 348 haTotal berth length 18.2 kmMax. canal depth 16.0 mMax. vessel draft 14.5 mMain infrastructure figures

6More than 800 Years of History5th 9th c the River Daugava was used as one of the oldest trade routes12th c formation of the first settlements on the mouth of the River Daugava1201 foundation of Riga city by bishop Albert13th 15th c prosperity as one of most important ports of the Hanseatic League18th 20th c the first Russian port in the Baltic sea and the largest export portDuring the Soviet period important foreign trade port with intensive infrastructure development

History

7Riga in the Network of Eurasian Transport CorridorsRiga as a part of the corridor is linked to the Trans-Siberian Railway

Haulage by the Trans-Siberian Railway saves transit time by 12-15 days in route Far East EuropeEast-West transport corridorEasy access to the corridor connecting Europe with the Middle EastNorth-South transport corridorLocation

8The Baltic Sea Region- Strong Port Competition14 ports compete for cargo to/from Russia, other CIS countries

Total cargo turnover at the ports of the Eastern coast of Baltic Sea reached 380 mln t in 2013Eastern Baltic Sea RegionLocation

RUS 215.8 mln.tEST mln.tLAT 69.1 mln.tLIT 42.4 mln.tFIN mln.t t*

Cargo turnover at the BSR(In 2013, distributed by country)* Finlands ports (Hamina/Kotka, Helsinki)

9Cargo Turnover at the Ports of the Eastern Baltic Sea Region (mln.t)Port Performance

10Market Shares of the Baltic Ports in 2013 (percentage of the total of the countries)Port Performance

11Dry Bulk Market at the Eastern Baltic Sea Region Ports in 2013 (market share % of total segment)Total dry bulk market at the ports of the Eastern Baltic Sea Region (EBSR) reached 95.11 mln.tDry bulk

Port Performance

12General Cargo Segment at the Eastern Baltic Sea Region Ports in 2013 (market share % of total segment)Total general cargo market at the ports of the Eastern Baltic Sea Region (EBSR) reached 88.04 mln.t

General cargo

Port Performance

13Total liquid bulk market at the ports of the Eastern Baltic Sea Region (EBSR) reached 196.86 mln.t

Liquid Bulk

Port PerformanceLiquid Bulk Market at the Eastern Baltic Sea Region Ports in 2013 (market share % of total segment)

14Cargo Turnover at the Baltic States Ports in 2009-2013 (mln.t)Rga22%4035302520151050

Port Performance

15Regular Container and Ferry Liner ServicesConnectivityContainershipsRiga-Teesport-Rotterdam-Helsinki-St.Petersburg-UstLuga-Pori-Klaipeda-Aarhus-Lubeck-Sheerness-GhentCMA-CGMHamburg-Bremerhaven-Riga-KlaipedaUnifeeder Container ServiceRotterdam-Hamburg/Bremerhaven-Riga-Klaipeda-Gdaynia/GdanskTallink (ro-pax)Riga-StockholmMannLines MultimodalRiga-Gdynia-Rotterdam-Bremerhaven-KaliningradMSCAntwerp-Bremerhaven-Riga-TallinnTeam LinesHamburg-Klaipeda-RigaAP Moller-Maersk/SeagoLineGdansk-UstLuga-Riga-Bremerhaven

16MSCCMA-CGMUnifeederTeam LinesMannLines MultimodalContainershipsMaerskTallink (ro pax)Regular container and ferry liner services

Regular Container and Ferry Liner ServicesConnectivity

17Hinterland Connections- Dedicated Container TrainsConnectivityContainer train Zubr (Riga-Minsk-Illichevsk)Container train Baltika-Transit (Riga-Almaty)Block Train(Riga-Hairaton)Container block train Riga Express (Riga-Moscow)

18Dedicated Container Trains (1/4)ConnectivityRiga Express Riga MoscowScheduled container block train service Riga MoscowRegularity: weeklyTransit time: 48-72 hoursTrain: 80-100 TEUCustoms clerance: 24-36 h (whole train)Operator: SRR, Logistic Operator

19Dedicated Container Trains (2/4)ConnectivityBaltika-Transit Rezekne AlmatyA scheduled block train serviceTwo container trains per weekTransit time 8-10 days20 188 TEUs in 2010

20Dedicated Container Trains (3/4)ConnectivityA dedicated block train service for the delivery of non-military goods to the US troops in AfghanistanService started in February 2009Average transit time 10-11 daysBlock Train Riga Hairaton

21Dedicated Container Trains (4/4)ConnectivityScheduled container train between Riga and Minsk (Belarus), with further deliveries via Orsha (Belarus) and Odessa (Ukraine) to Illichevsk (Ukraine)Transit time: 2d 18h (Riga-Illichevsk)Operator: LDZ Cargo Loistika (in Latvia)Container train ZubrRiga-Minsk-Illichevsk

22EMMA - Eurasian Multi-Modal AllianceConnectivitySince 2011 a joint venture EMMA was established between Latvian forwarder SRR and French logistics group GEFCO for services to/from Riga to/from Central AsiaEurasian Multi Modal Alliance

23Port InfrastructureInfrastructureTotal port area6 348 haPort land1 962 haAvailable land 445 haTotal berths length 13.8 kmMax. canal depth 16.0 mMax. vessel draft 14.5 m

Port Infrastructure

24Facilities for Cargo HandlingTotal cargo handling capacity 55 mln.t/yearIn 2013 cargo turnover- 35.5 mln.tCapacity utilization~ 65 %InfrastructureOpen storage1 783 362 mClosed storage358 988 mCold storage15 623 mCold storage13 500 tDry bulk (silos)255 000 mLiquid bulk tanks350 000 m

25Port Companies33 stevedoring companies (cargo terminals)25 shipping agencies37 companies providing different facilities for cargo warehousing19 companies operating customs warehouses13 cargo forwarding companies9 companies offering cargo processing and production servicesInfrastructure

26Facilities for Dry Bulk HandlingTotal handling capacity 31 mln.t/yearMain types of commodities: coal, fertilizers, woodchips, ore, grain 19 terminals Max draught at dry bulk berth 14.5 m InfrastructureUBC ONSAN (2012)Length 260 m DW 118 590GT 65 976

Cargo 111.7 thous.t. coal

Largest vessel handled

27Facilities for General Cargo Handling (excluding containers)Total handling capacity 5.5 mln. t/yearMain types of commodities: timber, ro-ro, refrigerated cargo20 terminalsRefrigerated storage 14 000 tMax draught at general cargo berth 10.3 mInfrastructurePOLA MED (2012)Length 170 m DW 29 324GT 18 977

Cargo 19 thous.t timber

Largest vessel handled

28Facilities for Container HandlingTotal handling capacity 630 thous.TEU/year3 terminals:Baltic Container Terminal Ltd, Riga Universal Terminal Ltd, Riga Container Terminal LtdAll terminals are directly linked to the main rail routesContainer ground slots- 9 350 units Crane productivity 25-30 cont.mov./hourMax draft at containerberth 13.5 m

InfrastructureEM PSARA (2012)Length 206 m DW 32 903GT 370 125Capacity2785 TEULargest vessel handled

29Facilities for Liquid Bulk HandlingTotal handling capacity 11 mln.t/yearMain types of comodities:Fuel oil, gas oil, gasoline, jet fuel, kerosine, etc8 terminalsTank farm- 350 thous.mMax draught at liquid bulk berth 12.5 mInfrastructureNorthern Bell (2010)Length 228 m DW 83 651GT 44 324

Cargo 54.9 thous.t. gasoline

Largest vessel handled

30Vessel Traffic at the Freeport of Riga PerformanceTotal number of vessel calls in 2013 reached 3 850 ships with tonnage 47.6 mln. GTCompared to 2012, the number of vessel calls declined (-2.7%) and gross tonnage almost equaled the level of previous year (-0.8%) Calls mln. GT Dry bulk vessels1778 6.75Tankers 648 6.76Container ships 592 6.82Passenger ships 42916.49Bulkers 320 9.91Others 83 0.51Calls by types of vessels in 2013

31

Cargo Turnover at the Freeport of Riga (mln.t) Average annual growth rate 8.6%

Performance 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 201313.414.918.121.724.024.425.425.929.629.730.5 TOTAL Liquid bulk General Dry bulk 403530252015105034.135.536.1

32Inbound and Outbound Cargo in 2013Performance77% of cargo handled at the Freeport of Riga is transit traffic

33Coal 39.6%14 042 thous.t (-5.8%) Oil products 19.8%7 030 thous.t (-8.4%) Containerized cargo 11.0% 381 099 TEU (+5.2%)Timber 5.8%2 071 thous.t (-10.4%) Chemicals (fertilizers) 4.0 %1 412 thous.t (-0.3%)

PerformanceMain Types of Cargo in 2013

34Passenger Traffic in 2013 (thous.)

In 2013 new record in passenger traffic was set- 837.7 thous. passengers (+2.8%), including 66.9 thous. cruise passengers (-19.4%)

Performance19524744250369176477690080070060050040030020010002005 2006 2007 2008 2009 2010 2011 2012 2013837

35Ferry Traffic in 2013TALLINK ensures daily passenger service in route Riga-Stockholm;TALLINK accounts for 92% of total passenger traffic in the port;Number of passengers carried by TALLINK increased by 5.2% in 20137006005004003002001000

Performance

36PerformanceCruise passengers nationality breakdownCruise Passenger Traffic in 2013

37Cruise Operating Partners in 2013 Performance

38Deepening of the fairway to 1517mLand reclamation and development of new territories for the construction of multifunctional dry bulk terminals on the Krievu salaModernization of the ports railway network, construction of a new railway bridge to KundzinsalaReconstruction of the ports breakwaters (moles)

Private Investments

Oil products terminal in BolderajaLiquified natural gas (LNG) terminal in DaugavgrivaVarious terminals (fertilizer, grain, container and logistics park) on the KundzinsalaTerminal for production and handling of bioethanol in VoleriDevelopment Projects (2010 2020)DevelopmentTotal port investment portfolio 1.1 bln EURPort Authority`s Investment 300 mln EURPrivate investment 845 mln EURPort Authority`s Investments38512378463

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39Deepening of the Fairway (1/6)Development16 m13.5 m12.5 m10 mCurrent depth of the fairway

40Deepening of the Fairway (2/6)Development17.0 m15.5 m12.5 m10 m1st phase: 2012-2014: canal depth -15.5 m2nd phase: 2014-2018: canal depth -17.0 m

Widening of the canal from present 100m to 135-165 mPlanned investment ~ EUR 100 mlnTwo-phase development:

41Dry Bulk Complex on the Krievu sala Island (3/6)Project: Relocation of Port Activities from the City Center to the Krievu sala islandProject duration (construction works): 2012-2014Investment: EUR 126 mln.Territory: 56 haCapacity 17-22 mln tons/year4 berths of 1180 m total lengthDevelopment

42Diverse Cargo Terminals on the Kundzisala (4/6)Total area: 181 haProject duration: 2010-2020Investment: EUR 460 mln10 terminals with diverse profiles:Dry bulk (incl. fertilizer, grain products) handlingMultimodal container complexMultifunctional (incl. refrigerated food) cargo complexGeneral cargo (incl. Ro-Ro) handling terminalLogistics and industrial parkDevelopment

43Diverse Cargo Terminals on the Kundzisala (5/6)DevelopmentKdz.sala Northern Project, Ltd. 59 haRiga Fertilizer Terminal, Ltd.41 haNational Container Terminal, Ltd.36 hKdz.sala Southern Project, Ltd.22 h

44Diverse Cargo Terminals in Bolderja, Daugavgrva and Voleri (6/6)Total area: 80 haProject duration: 2010.-2020.g.Estimated investment: EUR 385 mln3 terminals with diverse profiles: Dark oil products handlingProduction and handling of bioethanol (biofuel)Handling of liquefied natural gas (LNG)

Development

45Investment Opportunities at the Freeport of RigaLong-term lease of land on attractive terms (up to 45 years)445 ha of land available for developmentStatus of a licensed company and free zone regime allows to receive tax relievesFreeport Authority assistance in the development of private terminal infrastructureA favorable investment climate in Latvia

Investment

46Available Territories for DevelopmentInvestmentApprox. 445 ha are presently available for the development of new facilities (distribution, logistics, warehousing, etc.)Available territories

47Status of a Licensed Company and the Free Zone RegimeFreeport status provides for substantial tax reductionsStatus of a licensed company allows to receive direct tax relievesLicensed company fulfilling certain requirements of the Free zone regime can receive both direct and indirect tax relievesLicenses are issued for 5 years by the Freeport of Riga Authority

Investment Direct taxesIncome tax80 %Real estate duty80-100%Indirect taxesValue added tax100 %Excise tax100 %Customs duty100 %

Tax relieves:

48Investment Climate in LatviaBusiness without borders: an EU member stateAdvantages and experience in working with Russia and the CISA highly skilled and multilingual workforceEasy to set up and manage businessEqual rights and benefits for both foreign and local investorsOpportunities to qualify for funding from the EU`s Structural Funds

Investment

49Freeport of Riga AuthorityFunctions according to the Law on Ports:Landlord function (provision of infrastructure)Ensuring of navigation safetyMaintenance of hydrotechnical structuresMaintenance of navigation channelEnforcement of port regulationsLevying of port fees and chargesIssuing freeport licensesISPS Code implementation

Port Authority

50Structure of the Board State CommissionersRiga City Council CommissionersMinistry of TransportMinistry of EconomyMinistry of FinanceMinistry of Environmental Protection and Regional developmentChairman of the BoardCity CouncilCity CouncilCity Council Port Authority

51Structure of the Freeport of Riga AuthorityBoard of the PortCEOLegal departmentFinancial departmentMarketing departmentPort policeDeputy CEOShipping departmentHarbor masterInternational affairs departmentPublic relations departmentTotal staff 385 employeesPort Authority

Environment and development dep.IT department

52Our Vission and Missioncustomer`s port of choice because they value our safe, efficient and competitively priced servicesmultifunctional port which fully exploits the benefits of Freeport status and demonstrates sustainable economic successsocially and environmentally responsible port which is adaptable and able to respond to global trends and the changing needs of customers.

Port AuthorityWe will continue to develop the Freeport of Riga as a leading port of the Baltic States and as a source of real prosperity for Latvia. Our Mission:We aim to develop the Freeport of Riga as:

53Quality ManagementIn 1999 Freeport of Riga Authority introduced Quality Management System (QMS)Certification according to the international standardization system ISOQuality management standard ISO 9001:2008In 2005 the FRA implemented ISO 14001:2004

Port Authority

54Safety and SecurityCompliance with ISPS Code and other international regulationsUnified port security management system, includingElectronic notification system (ENS) unique in Eastern EuropeUp-to-date video surveillance system of the water area introduced in 2010 Unified and complex system of safe cargo handling compliant with international regulationsSecure provision of winter navigationPort Police of Riga established in 2011

Port Authority

55Freeport of Riga in the International Port Society (1/2)International Association of Ports and Harbors (IAPH)International Association of Cities and Ports (IACP)International Harbormaster Association (IHMA)International Federation of Hydrographic Societies (IFHS)European Sea Port Organization (ESPO)Cruise Europe (CE)Baltic Ports Organization (BPO)

Port AuthorityMembership in Professional Associations:

56Freeport of Riga in the International Port Society (2/2)Santander (Spain)Rijeka (Croatia)Le Havre (France)Casablanca (Morocco)Santos (Brazil)

Port AuthoritySister Ports:

57Social Responsibility ProjectsSupporting and organizing of annual Big Latvian Clean-up (Liel talka)Activities within the framework of City & Port Integration projectCity festival with port organized events, e.g. concert, regatta in the city canal, basketball tournament, etc.Social activities in the neighboring areas of the port - festivities, activities for children, port trips etc. Equipment of children's playground in VecmlgrvisConstruction of the bird observation tower on Island Mlestbas salia Support to the maritime education in Latvia and promotion of seafarer`s profession

Social Responsibility

58Environment Protection Activities (1/2)Certificate of Environment Management System ISO 14001:2004Environment quality monitoring system regularly air, soil and underground water monitoring Green award incentives - reduction on port dues to sea-going vessels certified by the Green Award FoundationConservation and maintenance of specially protected natural areas Social Responsibility

59Environment Protection Activities (2/2)Major environment protection projects:Sanitation of Historically Polluted Places in Sarkandaugava (ongoing, with Swiss government support)Reconstruction of sewage treatment plant (completed 2008)Railway noise protection walls along Daugavgrva residential area (completed 2005)Social Responsibility

60Competitive Advantages of the Port of Riga (1/2)Strategically well linked to economically strong and developing areasMultifuncional port with powerful infrastructureFlexible and competitive port chargesHigh-quality servicesProfessional port authority with clear vision for port`s developmentFavourable business conditions:The status of a Free Economic ZoneLong-term leasing of land on attractive termsAvailable land for developmentSummary

61Competitive Advantages of the Port of Riga (2/2)Advantages and experience in working with Russia and the CISThe closest EU port to MoscowEuropean Union border with RussiaExcellent rail connections with the standard Russian 1520 mm rail gaugeImprooving railway tariffs and easy border crossing proceduresBusiness competence, language knowledge and experience in Russia/CIS marketsSummary

62Thank you for your attention!