Estonian finmin: We anticipate support from EIB in increasing Europe's defense capacity

TALLINN – Estonian Finance Minister Mart Vorklaev met with Nadia Calvino, the new president of the European Investment Bank (EIB), in Tallinn on Wednesday, with whom he discussed the EIB's role in supporting Europe's strategic priorities.

"Russian aggression in Ukraine has weakened the sense of security in Europe. We talked with Nadia Calvino about the EIB's role in supporting Europe's strategic priorities, how the bank supports the economic development of Estonia and Europe, including by increasing the defense capabilities of countries," Vorklaev said.

At the meeting, Vorklaev introduced Estonia's plans to strengthen defense capabilities -- for example, it has been decided to create a defense industrial park, for the development of which the government initiated a national designated spatial plan and a strategic assessment of the environmental impact.

"On the part of the state, we are ready to create all the prerequisites in order to develop defense technology in Estonia as well. We have a strong and capable technology sector, the potential of which must be utilized. Ukraine's experience shows how important a role smart technology plays in a war situation," the minister said.

In January, the European Commission and the EIB's sister institution, the European Investment Fund (EIF), established a defense capital fund, which supports new technology companies in the field of defense. The EIB already has under its wing the Strategic European Security Initiative (SESI), for which the bank has allocated six billion euros to finance research, development and innovation of dual-use technologies.

The bank will continue to support reconstruction works in Ukraine on a large scale this year as well, for which a separate EU4U fund has been established.

"The challenge to Estonia's granting of a guarantee of 10 million euros also reached a Supreme Court decision this week and we can finally go ahead with confirming the guarantee," Vorklaev said. "By supporting Ukraine, we are also contributing to the protection of our own country and every contribution is important so that the war does not reach us."

Calvino said that European Union support for Ukraine, as well as broader European security, was a central theme of discussions this week.

"EIB support for Ukraine remains steadfast and unwavering. To date, we have provided over two billion euros to support Ukraine since the Russian invasion," she added.

One important area in which the bank is continuing to invest in Estonia is various infrastructure investments, especially in energy.

"The more diverse our energy infrastructure is, the better we are protected from possible failures and interruptions," Vorklaev said.

He added that investments in renewable energy, led by the development of offshore wind farms, in storage and connections are especially important.

Estonia's interest in the development of critical raw materials, which can help the transition to clean energy, was discussed and potential new green technology projects that could receive EIB support in the future were also named at the meeting. In Estonia, the EIB Group signed 540 million euros in new commitments for projects in 2023, the highest annual figure ever. The EIB is also bringing additional financing to smaller companies, whom these funds reach through local banks.

"We agreed with the minister of finance that the EIB Group and the Estonian government can cooperate even more closely -- especially in promoting innovation, energy security and environmentally sustainable transition. We need to ensure that these initiatives enhance Europe's competitiveness and wider security. Financing agreements such as the loan to the Estonian government, the Sopi-Tootsi wind farm and the support of small businesses reflect our commitment to building a smarter, greener, fairer and more coherent economy," Calvino, who also announced plans to open a new local office in Tallinn, said.