Estonia Accelerates Green and Digital Initiatives with €400 Million EIB Financing

Estonia Accelerates Green and Digital Initiatives with €400 Million EIB Financing

(IN BRIEF) The European Investment Bank (EIB) has approved a €400 million loan tranche to Estonia, marking the second installment of a larger €700 million loan aimed at bolstering the Estonian economy. This financing, focused on green and digital investments, complements EU grants and supports Estonia’s transition towards a smarter, more sustainable society. With around half of the EIB’s financing in the EU directed towards cohesion regions, the support includes projects for a just transition to a low-carbon economy, particularly in the county of Ida-Virumaa. Estonia’s total investment plan of €5.2 billion, with substantial funding from EU structural funds, reflects a commitment to a greener, more connected future. Minister of Finance Mart Võrklaev emphasized the necessity of external financing to expedite Estonia’s transition, highlighting the country’s dedication to a more sustainable path forward.

(PRESS RELEASE) LUXEMBOURG, 12-Apr-2024 — /EuropaWire/ — The European Investment Bank (EIB) gave the go-ahead for €400 million in financing for the Republic of Estonia to support green and digital investments in the country. The financing is the second and final tranche of a €700 million EIB loan to bolster the Estonian economy.

The support complements grants from the European Union and bolsters its cohesion policy in Estonia during the EU’s 2021-2027 financing programme. Around half of EIB financing in the EU is directed towards cohesion regions, where per capita income is lower.

The EIB support for Estonia includes the co-financing of projects to ensure a just transition to a low-carbon economy in the county of Ida-Virumaa.

The total volume of investment planned by the Estonian government is €5.2 billion, with around €3.4 billion to be financed by EU structural funds and the rest to be provided as national co-financing that includes the EIB loan.

“The EIB loan allows Estonia to kick-start and accelerate the implementation of the EU grant-funded projects to boost a smarter, greener and more connected society,” said EIB Director Jean-Christophe Laloux, who signed the agreement on behalf of the bank. “It is a cornerstone of the EIB´s support to the Estonian economy and implementation of the Cohesion Policy Funds programme.”

The EIB and Estonia had two similar agreements during previous financing periods: an initial one for €550 million and another for €720 million.

Minister of Finance of Estonia Mart Võrklaev said: ”Developing a more research-intensive and resource-saving economy and making a digital and green transition with only Estonian tax money would take significantly more time.  As a country with a green mindset, we will use EIB finances and EU cohesion policy funds to move faster towards carbon neutral and more digital society. The latest crises have also clearly shown the need for that and I´m glad we can use EIB help to progress faster.”

Background information

EIB

The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. It finances sound investments that contribute to EU policy objectives. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion, and support a just and swift transition to climate neutrality. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion, and support a just and swift transition to climate neutrality.

The EIB Group, which also includes the European Investment Fund (EIF), signed a total of €88 billion in new financing for over 900 projects in 2023. These commitments are expected to mobilise around €320 billion in investment, supporting 400 000 companies and 5.4 million jobs.

All projects financed by the EIB Group are in line with the Paris Climate Accord. The EIB Group does not fund investments in fossil fuels. We are on track to deliver on our commitment to support  €1 trillion in climate and environmental sustainability investment in the decade to 2030 as pledged in our Climate Bank Roadmap. Over half of the EIB Group’s annual financing supports projects directly contributing to climate change mitigation, adaptation, and a healthier environment.

Approximately half of the EIB’s financing within the European Union is directed towards cohesion regions, where per capita income is lower. This underscores the Bank’s commitment to fostering inclusive growth and the convergence of living standards.

In 2023, the European Investment Bank (EIB) has announced a record year of financing for projects in Estonia, with a total investment of €540 million. This represents a significant increase from 2022, and EIB Group financing in the country over the past five years now totals almost €2 billion. Read more here.

Media Contact:

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SOURCE: European Investment Bank