Construction by several industrial firms at Narva Industrial Park has been suspended due to the war in Ukraine. The border region with Russia has become a high-risk area for investors, and Estonia's border city will also now miss out on several hundred planned new jobs.
Seven companies are currently already operating at Narva Industrial Park, providing jobs for some 700 people. Construction for an additional five companies was slated to begin in the near future, however development was halted by the outbreak of Russia's current war of conquest in Ukraine.
The competitive advantage offered by Narva Industrial Park — its location on the border of the EU and Russia — has suddenly become a problem instead.
"Of course we're not as attractive anymore, and not just to Eastern but also Western investors," said Narva Industrial Park manager Vadim Orlov. "It is clear that we're a region bordering on the Russian Federation, and that has become a high-risk area."
The change happened just after February 24. Investors expect stability and clarity in the return on investment, but neither is no longer guaranteed.
"For example, a Russian citizen cannot get an Estonian visa, their e-residency is revoked, the movement of money is incomprehensible, as is the movement of goods," Orlov explained. "Such a situation cannot be considered a favorable investment climate."
According to the manager, among those backing out are both third country and EU businesses. The industrial park believes that these investments have been put on hold.
"So far, there have been no such refusals along the lines of 'We are never doing anything again,'" he nonetheless added. "Five projects have been halted with a total investment volume of nearly €200 million and some 700 jobs."
How long until this war-induced pause may end is unclear. In the meantime, as it waits for investors, the industrial park will focus on developing its infrastructure.
Editor: Aili Vahtla