Government delays giving €20 million to Tallinn Airport

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Tallinn Airport. Source: Ken Mürk/ERR

Plans to give Tallinn Airport €20 million funding may be on hold for some time as the Ministry of Finance is checking if the European Commission should be asked about state aid.

Before the coronavirus pandemic, Tallinn Airport was expecting to make a large profit in 2020, but instead accrued a loss of €2 million. The company believes it has lost €30 million from its investment capacity in 2020 and 2021.

Building work is also taking place at the airport and additional infrastructure is still needed, such as new aircraft maintenance hangars and logistics centers.

The Ministry of Economic Affairs and Communications (MEAC) completed a plan in mid-May, which would give €20 million to the company's share capital. 

The ministry said as the money would be given by a private investor and is not legally state aid there were no plans to ask the European Commission for state aid.

However, the Ministry of Finance is being more cautious. Kalle Viks, an analyst at the State Assets Department, says that the commission will be consulted just in case.

"It is important for the Ministry of Finance to ensure clarity in such an issue and to find an answer to the question of whether it is state aid or not," said Viks.

The Ministry of Finance noted that private investors generally want to earn a return on their investment. But Tallinn Airport has already promised in previous loan agreements that it will not pay dividends to the state until 2033.

"If the European Commission considers this situation to be state aid and it is permissible state aid, then permission must come from the Commission for state aid authorization," Viks explained.

Viks could not say how long this could take as all permit applications are different.

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Editor: Helen Wright

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