Skip to main content
invest in estonia


Estonia’s path to growth starts with green energy for industry, says Joonas Vänto

Estonia’s future economic growth is increasingly tied to the production of renewable energy and the ambitious projects it could bring to the country, argues Joonas Vänto, Director of the Estonian Investment Agency (Invest Estonia).

At a major energy industry event last week, an Estonian entrepreneur ambitiously called for the country to double its annual electricity consumption within the next decade. And not just that, but also to meet this demand with renewable energy.

The focus of Invest Estonia is to attract the kind of energy-intensive, high-value investments that will help make this vision a reality. But there’s a chicken-and-egg problem in play.

Starting with energy

A call to increase energy production this dramatically may seem strange on the face of it, but based on my extensive experience with foreign investors, I can say with some confidence that the availability and price of energy are key to attracting foreign investment to Estonia.

Just as it takes time for a country to decide to invest in energy production capacity, it also takes time to decide to bring business to Estonia. Meanwhile, renewable energy is becoming increasingly important to investors. So it’s not just the availability of energy in and of itself that’s the deciding factor. Insufficient domestic renewable energy production capacity may sway investors to look elsewhere.

One thing is for sure — there will be no surplus electricity. As much green energy as we can produce, we can keep bringing in smart industry to use it. So power generation capacity and industrial projects must be planned hand in hand, driven by the bold vision that Estonia’s future could be characterised not only by the image of a strong digital nation, but also by highly developed, smart industry.

Some would argue that until there are large industrial projects ready to launch, there is no reason to invest heavily in the energy sector. But investors base their decisions on the current reality and clear development plans at a national level. Being too conservative, therefore, in our approach to developing renewable energy capacity, could mean missing out on considerable investments.


Estonia’s untapped growth potential

Estonia has great potential for renewable energy production. If this potential were realised, conditions here would become particularly competitive for attracting innovative industrial projects, up to medium-sized on a global scale. This, in turn, would help create a large number of high-paying jobs in Estonia.

Invest Estonia strategically focuses on health technology, energy technology, smart industry, and resource valorisation. Information and communications technology, where Estonia has already solidified its global position, remains important as well.

We analysed 12 industrial projects considering Estonia as their location, and estimated a combined annual electricity demand of 5.8 TWh, equivalent to 73% of the country’s current consumption.

If these plans were to come to fruition, it would mean a €1.4 billion investment for Estonia, a 4% increase in GDP, and almost 3,000 new jobs. Renewable electricity is a prerequisite for all of this.

International interest in Estonia as an investment destination is very high. The last two years have been record-breaking for Invest Estonia — in 2023, for example, we helped bring a total of €336 million in foreign investments to Estonia.

It’s worth noting that Estonia is not looking to attract just any kind of investment. We need to make sure that every project that comes here enhances, rather than disrupts, local value chains. That is why our 2024-2030 strategy focuses on bringing in high-value companies that fill the gaps currently limiting the growth of companies already here. We call this the value chain-based approach.

It’s also important to acknowledge, of course, that the investments facilitated by Invest Estonia only make up a part of all foreign investments reaching the country. Although interest and performance indicators are at record levels in our areas, there are sectors that are in a significantly more challenging situation today. This only means it’s all the more important to make sure that growth opportunities, where they exist, get all the support they need to be realised.

A good example of this is one of the most important investments in recent years, the Neo Performance Materials magnet plant, expected to start operating in the coming years. Its establishment in Estonia will drive the development of new activities and attract projects to support the electrification of the automotive sector. This has the potential to position Estonia as a key player in the green revolution of the European automotive industry.

Estonia has what it takes to be known as the country where innovation begins, from funding to industrial scaling and licensing.

From here, projects would move on to major new markets, but the know-how, research intensity, and intellectual property would stay here. To bring this vision to life, we need green energy. And we need lots of it.

Interested in investing in Estonia? Find out more about the country’s energy sector here and book a time via e-Consulting to speak to your personal advisor.

News & events

Need more information?

Need more information?

What is it like to run a business in Estonia? How to benefit from the e-solutions and the efficiency of our business culture? What are the opportunities in specific sectors? Who to partner up with?

The Estonian Investment Agency’s team is happy to help you via its complimentary e-Consulting service, organize online or offline follow-up events such as virtual investment visits and guide you through the fairly simple process of investing in Estonia.

Request e-consulting