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Estonia to provide €14 million annually in development aid for Ukraine

Estonia’s annual support package for Ukraine aims to bolster Ukraine’s economy through business cooperation and to aid in the country’s post-war reconstruction.
Kaja Kallas Volosymyr Zelenskyy Estonia Ukraine
Estonia’s Prime Minister Kaja Kallas and Ukraine’s President Volodymyr Zelenskyy during their meeting in Zhytomyr, Ukraine, on 24 April 2023. Credit: President’s Office of Ukraine.

Estonia has committed to allocating €14 million annually for Ukraine’s development, ERR reported on 19 January, citing Maris Ratnik, Estonian foreign minister deputy secretary general, responsible for foreign affairs and development cooperation.

Estonia ranks among Ukraine’s most steadfast supporters against Russian aggression, committing the highest share of GDP among all allies.

Ratnik outlined the distribution of these funds: 12.8 million euros to the Estonian Centre for Development Cooperation (ESTDEV), 1 million euros for humanitarian aid, and 200,000 euros to aid Estonian business cooperation with Ukraine, primarily aimed at establishing business contacts with Ukrainian partners.

Ratnik emphasized that this assistance is in line with Estonia’s long-term development cooperation strategy approved by the government in early January, as well as the principles and action plan for Ukraine’s reconstruction. The Estonian government has also identified key sectors where this funding could be most effective, drawing from their own past experiences and challenges in similar contexts. These sectors include education system reform, healthcare system development, and digital and cybersecurity solutions.

With Ukraine’s ongoing negotiations for EU membership, Estonia plans to share its own experience in the accession process and in utilizing EU fund subsidies. Ratnik highlighted the estimated 400 billion euros required for post-war Ukraine’s reconstruction, a sum that large donors like the World Bank, International Monetary Fund, European Bank for Reconstruction and Development, and the European Investment Bank are expected to contribute.

She also noted that these institutions do not implement projects independently but offer project financing for which applications can be submitted, including by Estonian companies. Ratnik further added that Estonian engagement in these projects would also yield tax revenues for Estonia.

She concluded by emphasizing the importance of supporting the functioning of Ukraine’s economy through entrepreneurship and business cooperation, which would ultimately reduce future costs for all donors, including Estonia, in rebuilding Ukraine.

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