Finance minister: Private investors can bank on the Estonian state

Mart Võrklaev talking to 'Terevisioon'
Mart Võrklaev talking to 'Terevisioon' Source: ERR

Private sector investors can rely on the state to act responsibly, Minister of Finance Mart Võrklaev (Reform) says.

Võrklaev made his response in the light of the recent decision to halt work on the development of an oil shale processing plant in Auvere, Ida-Viru County.

Investment into the new shale oil processing plant, dubbed Enefit280, stood at around €350 million, prompting concerns that its scrapping or delay would harm the overall investment environment in Estonia.

Võrklaev said earlier this week that the state will try to get the almost-finished plant up and running for even a short period of time, so as to avoid squandering those funds.

Appearing on ETV morning show "Terevisioon" Friday, Võrklaev said that: "The message in terms of the investment environment is that private sector companies often do not make such hasty decisions."

"From the point of view of private investment, you can rely on the state. The state behaves responsibly, creates a legal framework and adheres to that," he went on.

The minister stopped short of stating clearly whether the plant is to be scrapped before it is completed, or will temporarily be started up in any case.

Overall, however, its implementation would jeopardize environmental goals he said, charging Jüri Ratas' government and former Eesti Energia chair Hando Sutter of irresponsible risk-taking back in 2020, when the decision to construct the plant was made.

He added that he has faith in Eesti Energia's current management and in its ability to cut CO2 emissions to the extent that these could offset the plant's period of functioning, however long that might be.

The Ministry of Climate has not yet issued a comprehensive environmental permit to the oil plant or set the conditions for how, and for how long, the plant could operate within a valid permit's terms, he added.

Võrklaev said he did not have the figures to hand on losses resulting from the failure to start-up the plant and the profitability that can be achieved if it is started, and also declined to answer a question on the socio-economic effects in Ida-Viru County, of abandoning construction.

"We have to look for solutions on how to get the factory running and how to reduce the environmental impact in 10-15 years' time, meaning either this investment remains at zero, or it becomes profitable," he added.

Võrklaev said earlier this week that the state will try to get the almost-finished plant up and running for even a short period of time, so as to avoid squandering the nearly €350 million investment.

On the grounds of errors in the environmental impact assessment process, the Supreme Court last week revoked the building permit granted to Enefit Power AS for the construction of the Enefit280 oil shale production plant.

Enefit280 plant under construction in Auvere. Source: Rene Kundla/ERR

The plant had been unpopular with environmental groups from the get-go, one of whom, the NGO Loodusvõlu, from 2020 took the mater to court, aiming to annul the construction permit issued that year.

The NGO argued the planet would violate international climate agreements, adding that the impact of the construction permit has not been properly assessed.

State energy generator Eesti Energia, owner of the project, says it is still figuring out how much its cancellation would cost.

Reportedly around 500 people are employed on the project.

Andrus Durejko, Eesti Energia CEO, told ERR that the Ministry of Climate, which has not approved Eesti Energia's environmental impact assessment, is culpable in the hold-up.


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Editor: Andrew Whyte

Source: 'Terevisioon'

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