The euro-based loan was ratified 65-0 with no abstentions. The loan is for 15 years at a 4 percent annual interest rate.
With a total construction cost of nearly 369 million kroons ($22.7 million), the Tartu prison is the second most expensive building project in Estonia behind the SAS Radisson Hotel which carries a price tag of 640 million kroons ($39.5 million).
The NIB loan covers only half the cost of the prison, so the 2001-2003 state budget will have to co-finance the remaining 165 million kroons.
The purpose of the new prison is to decentralize places of detention and modernize prison facilities in Estonia.
Currently, most of the 4,680 inmates in Estonia are housed in prisons in Harjumaa County around Tallinn. The new building will be a regional maximum security facility serving the south and central parts of Estonia.
"Now, with all the prisons in the North, the police have to transport people back and forth between Tallinn and Tartu for court cases. The new prison will save some costs," said Peeter Naks, head of the Justice Ministry's prison department.
Naks added that the location of the new prison is more practical for visitors too, who now have to travel to Tallinn to see inmates.
The new detention center will allow officials to shut down the aged Tallinn Central Prison that has been criticized by both American and European authorities as decrepit and over-crowded. In its human rights report released in February, the U.S. Department of State said prison conditions in Estonia were poor, although there were some improvements from the previous year.
"A lack of funds and trained staff continued to be a problem," the report said. "Overcrowding in the antiquated Tallinn Central Prison persisted."
The report pointed out, however, that the Estonian government does have a multi-year plan in the works to improve the prison situation, including the reduction of the number of prisoners here.
Naks agreed that Estonia's nine prisons are packed and conditions poor for the inmates, who at Tallinn Central share 16 to a cell. The Tartu prison will be built within the standards of the European Union meaning a reduction in the number of detained occupying a cell and better bathroom, eating and recreational facilities.
The Tartu prison is just one part of the plan that includes reforming pieces of legislation that goes along with the prosecution and detainment of alleged criminals.
EMV, Estonia's second-largest construction firm, will build the prison, breaking ground within the next few months. Jaanus Otsa, EMV's director, would not disclose any details on the project until negotiations with the government were final, which he predicted would be in two weeks.
Mihkel Oviir, secretary-general at the Justice Ministry, told the press that construction would take 21 months and relocation another three months meaning the prison could be operational in 2002.
The Tartu prison will be located just outside of town and employ approximately 350 people. Correctional officers will most likely be relocated from the Tallinn Central Prison, but Naks said if authorities don't want to move, new officers will be recruited and trained.