The Government Approved a Recovery Plan Worth Near a Billion Euros

17.06.2021 | 16:24

Stenbock House, 17 June 2021 – At today’s meeting of the government, the government approved the Estonian recovery and resilience plan, i.e. a plan worth nearly a billion euros for the use of funds from the Recovery and Resilience Facility of the EU. The plan will be submitted to the European Commission, with which negotiations will continue.
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According to Prime Minister Kaja Kallas, the support of the European Union will allow crucial investments to be made for a greener and more digital future of Estonia. “This is a vital support for our people, companies, and the Estonian economy as a whole to cope with the effects of the virus crisis and to strengthen the health system and the hospital network,” said Prime Minister Kallas. “With these investments that are made with the support of the EU, we are also giving a push for the introduction of new technologies, acceleration of the green transition in the energy sector and ensuring security of supply, as well as enabling greener transport and better internet access throughout Estonia,” highlighted the prime minister.

“Approximately a billion euros is intended for preparing Estonia for the future – investments into the environment and saving of the climate, development of digital opportunities, hydrogen technologies, hospitals. If we use this money wisely, we will get a new and smart momentum to exit this crisis,” said Minister of Finance Keit Pentus-Rosimannus. “The issue of the Tallinn Hospital will also be resolved – we have had preliminary negotiations with the European Commission, and we will be able to invest 280 million euros in the Lasnamäe Medical Campus.”

The amount of the Estonian recovery and resilience plan is 982.5 million euros. Exactly how much funding Estonia will receive from the Recovery and Resilience Facility (RFF) will be made clear in June 2022, when the European Commission calculates the final amount of support for all Member States on the basis of the latest GDP data.

Investments account for an estimated 80% of the recovery and resilience plan, with the private and public sectors making an average of 130 million euros of additional investments per year over six years. According to the spring forecast of the Ministry of Finance, an additional wave of investments will be made at the best time for the economic cycle, meaning when the economy is functioning below its potential. The Ministry therefore considers the risks of economic overheating to be moderate.

The most important investments of the recovery and resilience plan are related to the green and digital transitions, where a total of more than 600 million euros is planned to be directed, a large part of which will go to businesses. The funding is planned to be supported by a total of 220 million euros being directed in the green transition of undertakings through a dedicated green fund, the uptake and improvement of innovative and resource-efficient green technologies, the upcycling of bio-resources, the uptake of integrated hydrogen technologies and the development of skills supporting the green transition.

Within the framework of the digital transition, Estonia wants to support the digitisation and automation of business processes with investments in the amount of 73 million euros, offer opportunities for the development of digital skills and create new opportunities for joining high-speed internet connection for 24 million euros. Digital public services for businesses and citizens are reaching a new level of development: event-driven and predictable, also improving the availability of open data and the quality of data in key registers, ensuring the sustainability of the digital state cloud infrastructure.

It is also planned to support investments in increasing the energy efficiency of apartment buildings and small houses and to boost the green transition in energy management. In the field of transport, it is planned to finance investments in rail and tram traffic related to sustainable mobility with the support of RRF. For example, the plan includes the construction of the Ülemiste joint terminal, which is a part of Rail Baltica, and support for the construction of the Tallinn Old Port tram line in the value of 26 million euros.

The approval of the recovery and resilience plan by the Government was preceded by a public consultation, which took place from 20 May to 4 June 2021. In total, feedback and suggestions were received from about twenty organisations and individuals. Most of the proposals concerned the more detailed design and implementation of the investments and measures planned in the recovery and resilience plan, which will be achieved in cooperation with ministries and stakeholders in the coming months.

After the approval of the recovery and resilience plan by the government, the Ministry of Finance will submit the plan to the European Commission, with which negotiations are ongoing. “The recovery and resilience plan is the form in which our priorities must be put and the financing and expected results agreed with the European Commission. The exact conditions of the planned measures will be determined in more detail in the coming months in cooperation with the stakeholders and ministries. In the official phase of negotiations with the European Commission, we will supplement and adjust the plan so that the framework agreed in it would enable the effective and efficient implementation of support facilities,” explained the Strategy Adviser at the Ministry of Finance Triin Tomingas.  Following the conclusion of the formal negotiations, an estimated three months from now, the European Commission will present its evaluation of the plan and submit it to the Council of the European Union for approval.

Recovery plan:

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