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Strengthening Estonia's successful development
EBRD adopts new strategy for the Baltic country
For more than a decade Estonia has been a forerunner of reforms and achieved
impressive growth, with GDP rising by more than 6 per cent a year since 2000.
High unemployment, low domestic savings and high current account deficits,
however, remain key risks to the economy, the EBRD says in its new
strategy for Estonia.
A main challenge will be to promote domestic savings, presently only 19 per
cent of GDP, to make investment less dependent on foreign financing. In this
context progress with structural reforms is necessary, by further
strengthening private-sector development, commercialising municipal
infrastructure, further restructuring the energy sector, and strengthening
non-bank financial activities such as leasing and insurance.
The EBRD remains ready to help Estonia meet these challenges following the
country’s accession to the EU on 1 May. The latest strategy envisions the Bank
focusing its activities in Estonia on the following priorities:
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In the enterprise sector the Bank will seek to support the larger industrial
and service enterprises to facilitate high inflows of foreign direct
investment and the expansion plans of Estonian enterprises. Increasing
emphasis will be put on equity investments.
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In infrastructure and environment the Bank will focus on financing
infrastructure investments and utilities at both national and local levels
without recourse to sovereign guarantees. The Bank will also aim to
participate in the financing of projects in the electricity sector that
improve cooperation and lead to the development of efficient markets within
the Baltic region and beyond.
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In the financial sector the Bank will continue supporting small and medium
sized enterprises with credit lines, leasing and equity via local and regional
institutions.
The Bank has signed 42 projects worth €1 billion, including €454 million of
EBRD financing, in Estonia. The private sector accounts for 87 per cent of the
Bank´s portfolio in the country.
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