New funds planned

TALLINN - Estonia’s Economy and Communications Ministry plans to create a new 12.8 million euro risk capital fund, reports Postimees Online. In essence, that would be Development Fund No. 2, since the previous fund has run out of money for new projects, Postimees said.

The original Development Fund has by now invested the majority of its 122 million kroons (7.8 million euros) and earmarked the rest. Thus a new “body” has to be created to continue the investments.
Economy Ministry economic development department head Tea Danilov said that due to the state budget law, the state cannot just allocate new money to the Development Fund, and the only possibility is to create a new investment fund, the shares of which the state could buy. The current legislation does not allow the state to buy the shares, thus an amendment to the Development Fund law will be initiated.

Danilov said that the bill will be submitted to the government and then to the parliament only after the elections, and the full process should take about 6 months. Approval from the Finance Inspection should take about as long.
The Development Fund started operating in June 2008, and so far has made 11 investments: Smartpost, Ilmarine Engineering, Goliath Wind, Massi Miliano, United Dogs and Cats, BioTap, Cellin Technologies and Modesat Communications from the start-up fund and GrabCAD, Inner Circle and Sportlyzer from the seed funding.