However, ETV news show "Aktuaalne kaamera" (AK) reported, many industry leaders are not yet sure how the fund will operate in practice.

The fund, proponents say, will make direct equity investments in companies developing defense technologies, supplemented by contributions from private investors.

IT and Foreign Trade Minister Tiit Riisalo (Eesti 200) told AK: "The defense industry consists of multiple sectors. This one single fund will not cover the entire spectrum. The fun's specific goal is to support high-tech defense industries."

The minister put the total number of companies in the Defense and Aerospace Technology association (Kaitsetööstuse ja kosmosetehnoloogia liit) at nearly 300.

Businesspeople attending a meeting at the ministry Monday were presented with an overview of the newly created fund, though audience questions were scant after that presentation, AK reported, while businesses are waiting to see what comes of the initiative.

Marko Kaseleht, the CEO of one company, SensusQ, which creates intelligence management systems, did inquire about the relationship between the newly established fund and NATO's innovation fund.

"It is very difficult nowadays in Europe and outside to find support and funding for lethal technologies. Today I understood that creating lethal technologies is not a hindrance for this fund," Kaseleht said.

SensusQ was established four years ago and operates in Ukraine and other countries.

The Estonian Founders Society ( Eesti Asutajate Selts), which groups technology companies, aims to develop defense technology entrepreneurship, and also took part in the discussions on creating the fund.

Allan Martinson, president of the founders society, said: "There has emerged a very strong — though small — community of defense technologies in Estonia, strong in terms of ambition, energy, and skills. On my list, there are 50 companies founded by Estonians. Additionally, there are about twenty more founded by Ukrainians but registered in Estonia."

Another company, Englo, in business for 30 years, manufactures sensors and demolition devices and works in construction and defense.

Company CEO Karin Punning said: "More resources are needed for development work, as it's a very long process.

"We may develop some devices in six months, while others might take two years. Testing and such activities all require resources," Punning went on.

The government is to decide on the criteria for the initiative, which will be overseen by venture capital fund manager SmartCap. by July 4.

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