• The EIB Group signed €540 million in new commitments for projects in Estonia in 2023, the highest annual figure ever.
  • Much of the funding will go to finance the green transition and energy-related infrastructure that will strengthen Estonia’s energy security and path towards decarbonisation.
  • According to the EIB Investment Survey, more Estonian firms view stricter climate standards as a risk than an opportunity.

The European Investment Bank (EIB) has announced a record year of financing for projects in Estonia in 2023, 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.

One key area of focus for the EIB in Estonia has been energy-related infrastructure that will build energy security and cement the country’s path towards decarbonisation and energy independence. A flagship project in this sector is the Sopi-Tootsi onshore wind farm, the largest single investment in onshore wind energy in Estonia. The wind farm will increase national wind production by about 80% while reducing the country’s strong dependence on shale oil. 

In addition to energy-related projects, the EIB also signed a financing agreement of €300 million with the Estonian government. The funding will support investments in the country’s green and digital transitions, helping it build a smarter, greener and more connected economy. This financing agreement is the first tranche of a framework loan package for €700 million, demonstrating the EIB’s long-term commitment to supporting Estonia’s development.

At the end of 2023, the EIB also signed a financing operation with Luminor Bank to improve access to finance for small and medium businesses (SMEs) and mid-caps in the Baltic region, with a specific focus on supporting the green transition.

The EIB Group, which also includes the European Investment Fund (EIF), provided total financing of nearly €1.3 billion for the Baltics overall in 2023.

“We are proud to have achieved a record year of financing in Estonia, demonstrating our commitment to supporting the country’s sustainable development,” said EIB Vice-President Thomas Östros, who oversees the Bank’s operations in Estonia. “Through our investments in energy-related infrastructure and the green and digital transitions, which is our number one priority, we are helping Estonia build a smarter, greener and more connected growth model. The EIB remains dedicated to driving positive change and contributing to a resilient and sustainable economy in Estonia and across the European Union.”

In 2023, the EIB Group’s financing in Estonia accounted for 1.4% of the country’s gross domestic product, supporting investment worth nearly €1.4 billion. These investments benefited over 500 SMEs and mid-caps, sustaining more than 2 500 jobs — a testament to the substantial role played by the EIB in fostering Estonia’s economic growth and development.

EIB Investment Survey for Estonia

Today the Bank also released its annual EIB Investment Survey. According to the survey, firms in Estonia have a relatively positive outlook on their investment intentions. While the overall investment picture remains relatively upbeat with 86% of firms having invested in the previous year, it is expected to cloud over given rather pessimistic view about short-term drivers and constraints to investment. A slightly larger share of firms expected to increase than decrease investment.

When it comes to the climate transition, Estonian firms have a dimmer and less consistent view than the EU average. A higher percentage of firms (and above the EU average) see the transition to stricter climate standards as a risk than as an opportunity. But despite this, a significant number of Estonian firms are taking action to reduce greenhouse gas emissions. However, only a minority of the country’s firms are setting and monitoring relevant targets, and an even smaller fraction are building resilience to climate risks.

Estonian firms also face significant long-term barriers to investment. The availability of skilled staff, uncertainty about the future and energy costs are among the most frequently mentioned challenges. Consult the full survey here.

Background information

European Investment Bank

The ElB is the long-term lending institution of the European Union, owned by the Member States. It finances sound investments that pursue 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.

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. It is on track to deliver on its commitment to support  €1 trillion in climate and environmental sustainability investment in the decade to 2030, as pledged in its Climate Bank Roadmap. Over half of the EIB Group’s annual financing supports projects that contribute directly to climate change mitigation, adaptation and a healthier environment.

Around half of EIB financing within the EU goes to cohesion regions, where per-capita income is lower. This underscores the Bank’s commitment to fostering inclusive growth and the convergence of living standards.