“Foreign investment projects usually take years to be completed, and the scare caused by the COVID-19 pandemic did place some projects on hold,” said Joonas Vänto, director at the Estonian Investment Agency (Invest Estonia). “However, the confidence of foreign investors indicated a recovery last year. We expect the recovery to continue this year. No major foreign investment projects have been stopped as a result of Putin’s war in Ukraine. The number of new investor enquiries has not decreased and the interest in investing in Estonia remains high.”
Foreign investors have invested primarily in the IT sector in the past, but last year, the industrial sector prevailed, accounting for approximately two-thirds of total investment facilitated by Invest Estonia. “The Swedish company Nilar is a fantastic example, building a battery and energy storage production site in Paldiski, Harju County,” Vänto said. “In the Estonian industrial sector, we are mainly looking for projects that will contribute to the green turn; Nilar is a great example of it. When it comes to building offshore wind farms, foreign investors with their contact network, know-how and funding are extremely important in making the green turn a reality.”
Besides attracting high value-added and capital-intensive investment to Estonia, the Estonian Investment Agency focuses on retaining the existing investments and encouraging expansion. “Nordea Bank has already announced its expansion, as have several other companies looking to expand,” said Vänto. “Solita, one of the largest IT companies in Finland, is another good example. The company has been growing steadily in Estonia and is planning to expand its operations.”
One of last year’s most noteworthy foreign investments was a ground station built by the US satellite company Globalstar on the outskirts of Kilingi-Nõmme, West Estonia; its antennas enabling data exchange with satellites. The main reason for the investment was Estonia’s economic and political stability.
Regarding the green turn, it is important to emphasise the example of the wind turbine factory in Baltic Chemical Park in Ida-Viru County. TBHAWT Manufacturing intends to invest 50 million euros in the plant’s construction to start manufacturing their own wind turbines there. “There is a great deal of interest from foreign investors in the innovation and the green turn currently occurring in Estonia; TBHAWT Manufacturing‘s investment is an example of that,” Vänto explained.
The Estonian Investment Agency helped contribute 160 million euros of foreign investment to Estonia in 2020, which helped create over 800 high-paid jobs all over Estonia. In 2019, the year before the COVID-19 pandemic, the Estonian Investment Agency attracted 324 million euros in foreign direct investment and created nearly 1,500 new jobs all over Estonia.
With innovative and creative solutions, coupled with bold and strategic decisions, the Estonian Investment Agency has gained recognition and won many important awards and international attention. The Emerging Europe Awards has selected the Estonian Investment Agency as the best investment agency in Eastern and Central Europe for two consecutive years; in 2020, the agency was awarded the United Nations Investment Promotion Award as, according to the U.N, the agency has shown readiness, innovation and excellence in supporting the evolving needs of investors during the COVID-19 crisis. In 2021, its work in automating investment promotion was listed in UNESCO’s list of 100 most promising artificial intelligence related solutions for the benefit of humanity.
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