Estonia seeks strategic investor for military explosives facility

Estonia is seeking a strategic investor for a planned military explosives plant, as the government moves to strengthen domestic defence production and reduce Europe’s dependence on external supply chains.

The government has authorised Defence Minister Hanno Pevkur to launch a selective tender process to identify a partner for state-owned company Hexest Materials, Caliber.Az reports via Estonian media.

Hexest Materials has been established to develop a facility for the production of RDX military-grade explosives, a key component in ammunition manufacturing. The project is intended to address ongoing shortages of explosive materials across Europe, reinforce Estonia’s defence industrial base, and provide a boost to the national economy.

Under the proposed structure, the Estonian state will retain a controlling stake, while offering up to 49% of equity to a private investor. Officials said potential partners would be limited to companies from allied countries with established expertise in explosives, ammunition or broader defence manufacturing.

A minimum investment threshold of €50mn has been set for participation in the process. Candidates must also meet strict security requirements and demonstrate relevant technical capabilities.

Hexest Materials said preparatory work for the investment process has already been completed, including refinement of the business plan and ongoing discussions with potential technology partners. The company aims to begin production by 2028.

By Aghakazim Guliyev