Estonia redirects €200 million in unused EU funds to defence sector

The Estonian government has decided to allocate €200 million in previously unused EU cohesion funds to bolster the country’s defence sector, with the money set to support infrastructure development for the Estonian Defence Forces (EDF) and the establishment of a defence industry park in Tõstamaa.

The decision, made last week, involves diverting funds from other sectors over the coming years. All ministries have until the middle of next week to propose which of their planned projects they are willing to forgo to prioritise defence spending, Caliber.Az reports via ERR. 

According to Oliver Tüür, head of the national defence department at the Estonian Defence Ministry, the funds will likely be used for a range of defence-related infrastructure initiatives, including facilities for allied forces, training grounds, and educational infrastructure.

“The specific details are still being finalised. We’ll present our proposals to the government and final decisions will be made by the end of May,” Tüür said.

A significant portion of the funds may also go toward building core infrastructure for a new defence industry park in Tõstamaa, Pärnu County. The planned development will include essential utilities and logistics features such as roads, fencing, power and water systems, and storage facilities to prepare the site for defence companies.

The selection of companies to operate in the Tõstamaa park is scheduled for August, with production expected to begin in 2027. The EU cohesion funds must be used by 2029. Tüür said this is an important factor in the ministry's decision-making process when determining where the money should go.

Tüür noted that the Ministry of Defence has a clear timeline and a high degree of confidence that the chosen projects can be completed within the required timeframe. 

“Infrastructure projects in our area of responsibility are generally quite predictable. We're relatively confident about when they'll be completed,” he said.

By Sabina Mammadli