Estonian Recovery Plan

In relation to the reduction of the support amount (-12.13%), the mitigation of time-related and financial risks, and the European Commission’s REPowerEU proposal, the Government of the Republic decided on 30 June 2022 to exclude Tallinn Hospital (280 million euros), Rohuküla railway (34 million euros), and the acquisition of multifunctional helicopters (46.3 million euros) from the Recovery Plan.

On 21 July 2022 the Government of the Republic decided to transfer Viljandi Hospital from the European Regional Development Fund to the Recovery and Resilience Facility for the period of 2014–2020, as the hospital will not be completed by the eligibility deadline for the expiring period and has become considerably more expensive (updated amount of 72 million euros).

On 20 September 2022 the Government of the Republic decided to replace the investment of Rail Baltic Joint Terminal 5 with the financing of the Rail Baltic viaduct, as the procurement of the joint terminal failed and the financed building will no longer be finalised during the implementation period.

The Government of the Republic decided on the negotiating position of the amount of support released on 20 September and 29 September 2022 as follows: cover the appreciated investments included in the Recovery Plan: green technologies (5 million euros), energy measures (9.9 million euros), Tallinna Vanasadama tram line (10.5 million euros); and add new measures or increase existing ones in the process of coping with the energy crisis: additional support to entrepreneurs for the deployment of resource-efficient green technologies (10 million euros); support measure to entrepreneurs for security of supply investments (20 million euros); additional money to support the reconstruction of small residential buildings (8.9 million euros); West-Estonian radar (66.8 million euros); increasing distribution network capacity (20 million euros); multifunctional work vessel (EUR 18 million euros). 

In May 2022 the REPowerEU initiative was agreed to at the EU level, focusing on rapidly reducing the dependency on fossil fuels from Russia and boosting the green transition. The legal framework for the REPowerEU support has not yet been established, but the currently agreed upon amount of support allocated to Estonia is 83,423,000 euros. In addition, it is possible to transfer the unused Brexit adaptation reserve amount of 6,615,646 euros to REPowerEU. Financing proposals to the extent of 90,038,646 euros can therefore be made at the start of negotiations with the European Commission. To use REPowerEU, the Recovery Plan must be amended and the REPowerEU chapter incorporated into it, with the latest national deadline for achieving the results being May 2026. 

Reforms and investments included in the REPowerEU chapter must contribute to at least one of the following objectives (Article 21c section 3 of the Regulation):

• improvement of the energy infrastructure and facilities to meet the security of supply of oil and gas in the diversification of the union's energy supply (the 'do no significant harm' principle does not apply here);
• increasing the energy efficiency of buildings and related critical energy infrastructure, achieving carbon neutrality in the economy, introduction of sustainable biomethane and renewable or fossil-free hydrogen, increasing the share of renewable energy;
• elimination of bottlenecks for the transfer and distribution of energy nationally and cross-border, and for support of pollution-free transport (including railways) and its infrastructure;
• supporting the previous points by accelerated requalification of labour for green skills, supporting the value chains of key materials and technologies related to the green transition;
• tackling energy poverty and encouraging the reduction of energy consumption.

The choice of supported reforms and investments was based on the country-specific recommendations made for Estonia for 2022/2023, including increasing public investment in green and digital transitions and energy security, which involves using RRF, REPowerEU, and other EU funds; reducing overall dependency on fossil fuels and diversifying the import of fossil fuel, accelerating the deployment of renewable energy sources by ensuring adequate interconnection capacity and strengthening the domestic power grid, increasing energy efficiency. Given the amount of the support, all the country-specific recommendations cannot be covered from the REPowerEU budget.

In addition to compliance with the REPowerEU objectives and compliance with country-specific recommendations, the suitability of reforms and investments within a narrow timeframe (results must be achieved by May 2026 at the latest), compliance with the ‘do no significant harm’ (DNSH) principles, the existence of alternative funding sources, and the inevitability and effectiveness of reforms or investments was assessed. 

On 15 December 2022 the Government of the Republic decided on the financing proposals to be included in the Recovery Plan to the extent of the amount of REPowerEU and to start negotiations with the European Commission as follows: renewable energy acceleration reform 31.8 million euros; increasing biogas production and deployment 20.2 million euros; additional funding for energy efficiency of small residential buildings 20 million euros; additional funding for the capacity to integrate renewable energy production into the grid 18 million euros. 
 

Vabariigi Valitsuse protokollilise otsuse lisa: