EU and ministry projects focus on long-term rural area development

5G development is one of the areas being supported by EU funds over the next few years.
5G development is one of the areas being supported by EU funds over the next few years. Source: Siim Lõvi /ERR

A total of €69.29 million in European Union funds has been earmarked towards the upgrading of fixed internet connections via the mobile network in rural areas in eastern Estonia in particular over the next few years, while a separate, domestic initiative aims to encourage relocation to these, often depopulated areas of the country.

The funding covers the period 2021-2027, and the Ministry of Economic Affairs and Communications is preparing measures to initiate the spend.

The overwhelmingly rural Võru and Lääne-Viru counties have been taken as a test bed for preparatory work.

The government's "Estonian Digital Society 2030" plans to have rapid reliable and affordable communication connections across Estonia regardless of location, both for fixed and mobile networks, by 2030.

The economics ministry asked the Consumer Protection and Technical Regulatory Authority (TTJA) to conduct a pilot project involving detailed measurements of mobile coverage in two counties and, in cooperation with mobile operators, to map areas where there is no coverage at all or where its quality is not good.

The projects are wholly EU-funded; €45 million of the total derives from the European Regional Development Fund and €24.29 million comes from the European Resilience and Recovery Facility and

An additional €18.74 million, also EU money, is also earmarked for uninterrupted 5G coverage along key transport corridors, BNS reports; EU funds can only be used for 5G development and not older networks.

Meanwhile Minister of Rural Affairs Urmas Kruuse (Reform) has unveiled another, separate regional development initiative to be piloted by the Rural Development Foundation (MES) which aims to encourage people to settle in the countryside, again focusing on two regions, Võru County and other areas of southeastern Estonia, and Ida-Viru County.

Kruuse said: "The target group of the loan is people living in the countryside or settling in the countryside who, together with housing, will create jobs in the area or find work in the area themselves."

The government approved the proposal in September, while the ministry and the MES are in the process of developing more detailed terms and conditions, BNS reports.

The MES has also endorsed the terms and conditions of mortgage co-lending with banks to facilitate people's settling in the countryside.

Kruuse said of the issues the initiative attempts resolution on are that: "The main problem so far has been the low market value of properties located at a distance from the population hubs and the resulting additional collateral requirements for obtaining loans. To eliminate market failures, the MES is stepping in."

The MES is to allocate €5 million from its own equity, while the co-loan maximum the MES is offering comes to €100,000.

The maximum amount that can be borrowed under the arrangement is €200,000, assuming a bank will agree to put up 50 percent.

Population indicators, economic indicators and the price statistics of the region's real estate market were the main factors in picking the regions in focus, while Kruuse called the step significant in helping to alleviate obstacles to acquiring a home in a rural area.

Settlements of up to 1,000 inhabitants in Põlva and Valga counties, as well as Võru and Ida-Viru counties, qualify for the support. A loan can be used for the purchase, construction or renovation of a dwelling, including a semi-detached or terraced house, BNS reports.


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Editor: Andrew Whyte

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