New government plans to privatize non-strategic state-owned companies

A Nordica plane at Tallinn Airport.
A Nordica plane at Tallinn Airport. Source: Ken Mürk/ERR

The government will continue to privatize state-owned, but non-strategically important, companies. A list specifying which firms this will concern is to be completed by the end of the year.

Estonia currently has 27 state-owned and part state-owned companies, Thursday's "Aktuaalne kaamera" (AK) reported. Enefit Green, a subsidiary of energy generator Eesti Energia, has already been listed on the stock market.

The new coalition's agreement includes a clause about the continued privatization of companies that, from the state's point of view, are of little strategic importance.

Incoming minister for climate and the environment Kristen Michal (Reform) said the company is labeled as strategic or non-strategic based on its function.

Both full and partial privatization are on the cards, he said.

"Energy and, in the long term, infrastructure companies are still predominantly eligible," Michal told AK.

Kristen Michal (Reform). Source: Siim Lõvi /ERR

Those first on the list are likely to be airline Nordica, postal service Eesti Post/Omniva, and freight rail company Operail.

"It is in the interest of the state to be able to fly from Tallinn, but not necessarily to own the airline. If the airport can provide this, then actually the airline could be privatized," Michal added.

Another question is whether the government should be involved with organizing gambling and, thus the status of state lottery Eesti Loto. The company made €86 million last year, from 400,000 customers. Of this, €15 million was paid to the state.

Eesti Loto is one of the state-owned concerns likely to be privatized in the future.

Eesti Loto General Director Riina Roosipuu said the state expects revenues to help shore up the state budget, but curbing scope for gambling addiction to develop is also considered important.

"Ahead of the privatization decision being made, both sides must consider whether a privatized company can generate the same, or a growing, level of revenue in the future, and whether this is a sensible decision from an economic point of view. The other aspect is considering how to keep the risks under control," Roosipuu told AK.

Eesti Loto HQ. Source:

Roosipuu said the company could do well on the stock exchange.

Artjom Sokolov, head of corporate banking at SEB, said the state should not own companies at all.

"I would actually encourage privatization, or at least partial privatization, of all state-owned companies, since if we look at the Port of Tallinn or Enefit Green, as very strong examples, one of these is a growth company, one is a strong company in terms of yielding dividends, but certainly privatization would improve their quality of governance," Sokolov said.

The list of companies slated for potential privatization is due to be published at the end of the year.


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Editor: Aleksander Krjukov, Helen Wright, Andrew Whyte

Source: Aktuaalne kaamera

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