The existing Nursipalu training area, West of Võru city, is to be expanded three-fold in order to accommodate state-of-the art equipment and in reflection of the changed security situation.

Of 215 privately owned land units in the expansion zone, 22 are built on, properties which include farms and private residences.

The Center for Defense Investments (RKIK) has agreed to pay €3.5 million for the transfer of 20 of these properties, which works out at an average of €175,000 per property.

Minister of Defense Hanno Pevkur (Reform) said: "We are currently focusing on those people whose properties remain in the expansion area. The transactions concluded affirm the state's [earlier] pledge that the compensation provided would be a dignified one and not based on mere market value, but on restoration value."

The state had pledged to pay above the market rate for comparable properties elsewhere in Estonia after announcing the expansion nearly a year ago, given the forced-sale nature of the development; earlier, a like-for-like property exchange in other areas of the country had been proposed as a possible solution.

Transaction details include an "incentive" fee of up to 20 percent in the case of all properties, built up and not, and a further 10 percent fee in the case of property with residential buildings included.

The real estate sales are also capital gains tax exempt.

Compensation value was determined on a case-by-case basis during an appraisal process.

The existing Nursipalu military training area, re-commissioned several years ago, will rise in area from its current size of around 3,000ha, to around 10,000ha.

The expanded zone will permit the use of newer Estonian Defense Forces (EDF) procurements, including artillery, and will allow greater scope for hosting NATO allies, including the U.S., whose forces' main focus lie in South Estonia.

The equivalent training area in North Estonia is the Central Training Area in Harju County.

Latvia is also developing a military training area near Jekabpils.

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