EU Council approves Estonia's recovery fund plan

Euros (photo is illustrative).
Euros (photo is illustrative). Source: Siim Lõvi/ERR

The Council of the European Union approved Estonia's plan for the use of the EU's Recovery and Resilience Facility (RRF). The approval allows for the first allocation to Estonia be made, totaling €126 million.

Further disbursements from the support facility will take place once or twice a year as stated in the contract signed with the European Commission and need to go toward the established goals.

Estonia's RRF plan is drawn up for €982.5 million, but the exact sum of the support facility will become clear in June next year. Estonia has been ensured they will receive at least €759.7 million.

The resources from the RRF fund will go toward investments into climate, digital options, sustainable transport and energy and healthcare. "The main emphasis is on reforms to make Estonia more future-proof and the desire is to begin using the resources before the end of this year," said Minister of Finance Keit Pentus-Rosimannus (Reform).

A third of the facility's funds will be allocated to entrepreneurship. "We are expecting some €265 million worth of private investments through the recovery plan over the next six years, meaning an average of €44 million a year," the finance minister noted.

Finance ministry strategy adviser Triin Tomingas said the legal framework of the implementation of the recovery plan is being finalized and the ministry is also making preparations for the measures.

The majority of the support measures will be activated in the second half of 2022. "The final amount of support will depend on how our economy has done in recent years when compared to other European countries," Tomingas said.

The cumulative effect of the recovery facility for the Estonian economy over the next decade is estimated to be 6.2 percent of the GDP. About 72 percent of the total impact stems from domestic consumption and investments, 28 percent will be added via exports. Excluding exports, the positive impact is 4.44 percent over the next ten years.

Estonia's most important investments are linked to the green and digital transitions with €600 million earmarked for investments.

The Tallinn Hospital mega-hospital project will also receive aid from the facility, the goal of the investments is to develop modern treatment conditions and increasing resilience against healthcare crises.

€25 million euros will be used for creating internet connections with the "last mile" scheme.

€34 million will be used to build the railway line between Haapsalu and Rohuküla, €26 million for Tallinn's new tram line and €31 million for the Rail Baltic Ülemiste terminal. The government also hopes to finance Tallinn's new hospital with the money.

€55.5 million is planned to be spent on helicopters for the ambulance service.€17.6 million will be used to go to support the tourism sector, €64 million will go to fight the coronavirus.


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Editor: Kristjan Kallaste

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