Investing in Estonia with the support of Next Generation EU in 2020 to 2027
Next Generation EU (NGEU) is a temporary stimulus package by the European Union (EU) to power the recovery from the coronavirus crisis in Europe. The EU’s long term budget for 2021 to 2027 is topped up by EUR 806.9 billion through NGEU. The centrepiece of NGEU is the Recovery and Resilience Facility (RRF) providing EUR 338 billion of grants and EUR 385.8 billion of loans to support reforms and investments in EU Member States. The rest of the NGEU funds (EUR 83.1 billion) are distributed through other programmes – REACT-EU, Just Transition Fund, Rural Development, InvestEU, Horizon Europe and RescEU.
In addition to EUR 3.37 billion as grants from the EU’s long term budget, Estonia receives approximately EUR 1.42 billion as grants from NGEU, with the largest amount provided from the RRF. The graph shows the distribution of Estonia’s share of NGEU funds between different programmes.
RRF allocation for Estonia is estimated to be EUR 863.3 million. Volume of current RRP is EUR 953,3 million, contributing 59% to the climate and 22% to the digital objectives. More information on Estonia’s recovery and resilience plan can be found in English here. The European Commission has also created a RRF scoreboard where data on Estonia can easily be accessed by clicking on the flag.
RRF grants will be used for reforms and investments in (i) digital transition in business sector (EUR 116 million) (ii) green transition in business sector (EUR 220 million ); (iii) digital Estonia (EUR 122 million ); (iv) energy and energy efficiency (EUR 92 million); (v) sustainable transport (EUR 96 million); and (vi) health and social cohesion (EUR 336 million).
RePowerEU chapter was added to RRP of Estonia in 2023. EUR 90,4 million of grants will be used to accelerate the deployment of renewable energy and to increasing the production and use of biogas and biomethane.
The Just Transition Fund (JTF, EUR 198.9 million) is a funding instrument to support economic, social and environmental development in the Ida-Virumaa region of east Estonia. Historically, Ida-Virumaa has been primarily a mining and manufacturing area. With Estonia aiming to shift towards greener energy production, the existing oil shale mines have to be closed down and, consequently, employees linked to mining and manufacturing need to find new jobs elsewhere. Approximately 80% of JTF funds are channelled to support the local economy and labour force. The rest will be used for environmental and social inclusion purposes.
ReactEU (EUR 207,4 million) is a top-up for cohesion policy funds, that aims to invest into immediate response to COVID-crisis and repair the economy, including increasing the resilience of the healthcare sector, supporting enterprises and green investments and providing labour market measures.
The European agricultural fund for rural development (EAFRD, EUR 63 million) supports measures in the Estonian Rural Development Plan for 2014-2020, mainly investments in the processing and marketing of agricultural products and investments for the diversification of economic activities in rural areas, as well as environmental measures, LEADER activities, etc.
Other funds in the NGEU package (InvestEU, EU4Health, RescEU, Horizon Europe) do not have dedicated envelopes for Estonia and allocations will be decided by the EU in the time frames of open calls based on project applications.
Last updated: 13.10.2023
