This Decision is addressed to the Republic of Estonia.

4.The release of instalments in accordance with the financing agreement shall be conditional on available funding and a decision by the Commission, taken in accordance with Article 24 of Regulation (EU) 2021/241, that Estonia has satisfactorily fulfilled the relevant milestones and targets identified in relation to the implementation of the RRP. In order to be eligible for payment, Estonia shall complete the milestones and targets no later than 31 August 2026, subject to the entry into force of the legal commitments referred to in paragraph 1.

3.The pre-financing shall be released subject to the entry into force of, and in accordance with the financing agreement. Pre-financing shall be cleared by being proportionally deducted against the payment of the instalments.

2.The Union financial contribution shall be made available by the Commission to Estonia in instalments in accordance with the Annex to this Decision. An amount of EUR 126 008 898 shall be made available as a pre-financing payment, equal to 13% of the financial contribution. The pre-financing and instalments may be disbursed by the Commission in one or several tranches. The size of the tranches shall be subject to the availability of funding.

1.The Union shall make available to Estonia a financial contribution in the form of non-repayable support amounting to EUR 969 299 213. An amount of EUR 759 545 893 shall be available to be legally committed by 31 December 2022. If the update provided for in Article 11(2) of Regulation (EU) 2021/241 results in an updated maximum financial contribution for Estonia that is equal to or more than EUR 969 299 213, a further amount of EUR 209 753 320 shall be available to be legally committed from 1 January 2023 until 31 December 2023. If the update provided for in Article 11(2) of Regulation (EU) 2021/241 results in an updated maximum financial contribution for Estonia that is less than EUR 969 299 213, the difference between the updated maximum financial contribution and the amount of EUR 759 545 893 shall be available to be legally committed in accordance with the procedure set out in Article 20(8) of Regulation (EU) 2021/241 from 1 January 2023 until 31 December 2023.

The assessment of the RRP of Estonia on the basis of the criteria provided for in Article 19(3) of Regulation (EU) 2021/241 is approved. The reforms and investment projects under the RRP the arrangements and timetable for the monitoring and implementation of the RRP, including the relevant milestones and targets, the relevant indicators relating to the fulfilment of the envisaged milestones and targets, and the arrangements for providing full access by the Commission to the underlying relevant data are set out in the Annex to this Decision.

Article 1 Approval of the assessment of the RRP

(58)This Decision should be without prejudice to the outcome of any procedures relating to the award of Union funds under any Union programme other than the Facility or to procedures relating to distortions of the operation of the internal market that may be undertaken, in particular under Articles 107 and 108 of the Treaty. It does not override the requirement for Member States to notify instances of potential State aid to the Commission under Article 108 of the Treaty,

(57)Estonia has requested pre-financing of 13% of the financial contribution. That amount should be made available to Estonia subject to the entry into force of and in accordance with the agreement provided for in Article 23(1) of Regulation (EU) 2021/241(the 'financing agreement').

(56)The support to be provided is to be financed from the borrowing by the Commission on behalf of the Union on the basis of Article 5 of Council Decision (EU, Euratom) 2020/2053. The support should be paid in instalments once Estonia has satisfactorily fulfilled the relevant milestones and targets identified in relation to the implementation of the RRP.

(55)In accordance with Article 11(2) of Regulation (EU) 2021/241, the calculation of the maximum financial contribution for Estonia is to be updated by 30 June 2022. As such, in accordance with Article 23(1) of that Regulation, an amount for Estonia not exceeding the maximum financial contribution referred to in Article 11(1), point (a), of that Regulation should be made available now for a legal commitment by 31 December 2022. Where necessary following the update of the maximum financial contribution, the Council, on a proposal from the Commission, should amend this Decision to include the updated maximum financial contribution, calculated in accordance with Article 11(2) of that Regulation, without undue delay.

(54)The estimated total cost of the RRP of Estonia is EUR 982 490 000. As the RRP satisfactorily complies with the criteria for assessment set out in Regulation (EU) 2021/241 and, furthermore, as the amount of the estimated total costs of the RRP is higher than the maximum financial contribution available for Estonia, the financial contribution allocated for Estonia’s RRP should be equal to the total amount of the financial contribution available for Estonia.

(53)Following the positive assessment of the Commission concerning the Estonian RRP with the finding that the RRP satisfactorily complies with the criteria for assessment set out in Regulation (EU) 2021/241, in accordance with Article 20(2) of and Annex V to that Regulation, this Decision should set out the reforms and investment projects necessary for the implementation of the RRP, the relevant milestones, targets and indicators, and the amount made available from the Union for the implementation of the RRP in the form of non-repayable financial support.

(52)Estonia plans to take into account the input collected from stakeholders during the consultation process when implementing the measures included in the RRP. To ensure ownership by the relevant actors, it is crucial to involve all local authorities and stakeholders concerned, including social partners, throughout the implementation of the investments and reforms included in the RRP.

(51)During the preparation of the RRP, Estonia carried out a consultation process involving key stakeholders and the general public. Two rounds of stakeholder seminars were organised during the preparation of the RRP in December 2020 and in April 2021. The seminars were targeted thematically to various groups of stakeholders, namely local and regional authorities, social partners, civil society organisations, youth organisations and other relevant stakeholders. A public consultation of the full draft RRP took place in May 2021.

(50)The RRP includes the construction of the Rail Baltic Tallinn terminal, the starting point of Rail Baltic, a cross-border project connecting the three Baltic capitals and countries with Poland and the rest of the Union. Cooperation with Finland is planned in the context of the implementation of the measure aiming at developing a virtual assistant to access digital public services.

(49)A security self-assessment has not been provided as it has not been considered appropriate by Estonia, in accordance with Article 18(4), point (g), of Regulation (EU) 2021/241.

(48)The RRP contains measures that are expected to help Estonia to address the challenges posed by gender equality and equal opportunities for all, such as those that directly and indirectly aim to reduce the gender pay gap and address the needs of persons with disabilities such as facilitating the accessibility of the living environment. The measure on digital skills should contribute to increasing the number of women in information and communication technology and thus addressing gender segregation in the labour market. The investment to support youth employment should help young people to get in employment and thus contributing to their social inclusion. Reforms and investments included in the RRP should reduce existing social, economic and territorial disparities. The RRP refers to legislative and policy initiatives that are expected to complement the reforms and investments included in the RRP.

(47)The RRP displays coherence within each component and shows thematic interlinkages and synergies between the different components, in particular those related to digital transformation and green transition. However, in some areas, coherence is not fully achieved. While the RRP includes substantial investments to foster the green and digital transition and support economic growth, more reforms to strengthen the social safety net, notably broadening the coverage of unemployment insurance benefits, could contribute to cushion possible adverse effects on certain groups. The significant investments in health infrastructure could have been accompanied by measures leading to a greater increase in the health workforce to alleviate shortages. Long-term care is envisaged to be addressed with several measures, but the coherence and interlinkage between these measures could have been better ensured with broader reforms to improve the access and quality of long-term care. The measures included in the RRP to address the decarbonisation of the economy are mainly related to investments, while concrete actions to phase out oil shale are expected to be set out in the National Development Plan of the Energy Sector only at the end of 2025 and broader reforms, such green taxation, are not envisaged. Overall, the RRP is stronger on investment than on reforms.

(46)In accordance with Article 19(3), point (k), of and Annex V, criterion 2.11, to Regulation (EU) 2021/241, the RRP includes to a medium extent (Rating B) measures for the implementation of reforms and public investment projects that represent coherent actions.

(45)The administrative capacity of the central services charged with implementation and coordination of the RRP, namely the Ministry of Finance and the State Shared Service Center, and of the involved sectoral ministries is adequate to conduct their foreseen roles and tasks. A milestone should be included with regards to the enactment, before the first payment request, of the regulation setting out the legal mandate of the different bodies involved in the implementation of Regulation (EU) 2021/241.

(44)The RRP envisages that the existing integrated information system, namely the Structural Funds Operating System, should be used by all institutions involved in the implementation of the RRP and that all the projects under the RRP should be recorded in that information system. Information related to each project, such as the applicant’s data, general project data, objective, budget, sources of financing, intermediate and final milestones and targets, information on implementation, payments, non-compliance procedures, should be stored in the Structural Funds Operating System. It should also record all the audits of projects and of management and control systems and support the necessary audit trail and reporting under Regulation (EU) 2021/241 of the different measures, milestones and targets.

(43)The control system and arrangements proposed in the RRP of Estonia are based on robust processes and structures used in the existing national framework for the implementation of structural funds. Actors and their roles and responsibilities for the performance of the internal control tasks are clearly described in the RRP. The control system and other relevant arrangements, including for the collection and making available of all standardised categories of data set out in Article 22(2) point (d) of Regulation (EU) 2021/241, are adequate with respect to preventing, detecting and correcting corruption, fraud, conflict of interest when using the funds and to avoid double funding under Regulation (EU) 2021/241 and other Union programmes.

(42)In accordance with Article 19(3), point (j), of and Annex V, criterion 2.10, to Regulation (EU) 2021/241, the arrangements proposed in the RRP and the additional measures contained in this Decision are adequate (Rating A) to prevent, detect and correct corruption, fraud and conflicts of interests when using the funds provided under that Regulation, and the arrangements are expected to effectively avoid double funding under that Regulation and other Union programmes. This is without prejudice to the application of other instruments and tools to promote and enforce compliance with Union law, including for preventing, detecting and correcting corruption, fraud and conflicts of interest, and for protecting the Union budget in line with Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council.

Protection of the financial interests of the Union

(41)Estonia has provided individual cost estimates for all investments included in the RRP. The cost estimates have been validated by the Grant Management Unit of the Support Development Department of the State Shared Service Center, which is an internal government body. The cost breakdown is generally detailed and well-substantiated. The financial schemes included in the RRP are considered proportionate to the size of the corresponding sectors in Estonia, and their costs are deemed reasonable and plausible. For the other measures, comparisons with past investments of a similar nature are provided. The assessment of the cost estimates and inherent supporting documents show that most of the costs are well justified and reasonable. The amounts proposed for financing were deemed appropriate, but sometimes rather high compared to past experience or comparable projects. For this reason, the justifications provided are considered plausible only to a medium extent. Finally, the estimated total cost of the RRP is in line with the principle of cost-efficiency and is commensurate to the expected national economic and social impact.

(40)In accordance with Article 19(3), point (i), of and Annex V, criterion 2.9, to Regulation (EU) 2021/241, the justification provided in the RRP on the amount of the estimated total costs of the RRP is to a medium extent (Rating B) reasonable and plausible, is in line with the principle of cost efficiency and is commensurate to the expected national economic and social impact.

(39)Member States should ensure that financial support under the Facility is communicated and acknowledged in line with Article 34 of Regulation (EU) 2021/241. Technical support may be requested under the Technical Support Instrument established by Regulation (EU) 2021/240 of the European Parliament and of the Council to assist Member States in the implementation of their RRP.

(38)The milestones and targets that accompany reform and investment measures included in the RRP are clear and realistic and the proposed indicators for those milestones and targets are relevant, acceptable and robust. Measures included in the RRP are supported by milestones and targets spread throughout the implementation period, although the implementation of a number of projects, including the biggest investment, are only planned for 2026. Milestones and targets are also relevant for measures already completed which are eligible according to Article 17(2) of Regulation (EU) 2021/241. The satisfactory fulfilment of those milestones and targets over time is required to justify a disbursement request.

(37)The RRP presents an administrative organisation for its implementation in line with the process established in the context of the management of structural funds. The RRP provides an overview of the envisaged monitoring and reporting arrangements and identifies actors and their roles and responsibilities. The State Shared Service Center serves as the managing and coordinating body. Together with the Ministry of Finance, they are the central services responsible for coordination, monitoring and evaluation whereas line ministries are tasked with the implementation and monitoring of reforms and investments in their respective field.

(36)In accordance with Article 19(3), point (h), of and Annex V, criterion 2.8, to Regulation (EU) 2021/241, the arrangements proposed in the RRP are adequate (Rating A) to ensure effective monitoring and implementation of the RRP, including the envisaged timetable, milestones and targets, and the related indicators.

(35)The lasting impact of the RRP can also be enhanced through synergies between the RRP and other programmes, including those financed by the cohesion policy funds, in particular by addressing in a substantive manner the deeply rooted territorial challenges and promoting a balanced development.

(34)Structural changes are also expected from the implementation of the envisaged investments mainly through their expected positive impact on competitiveness. The investments aiming at deploying digital solutions in the construction and road freight transport sectors are expected to have a lasting impact. The investment in the deployment of very high capacity broadband networks in market failure areas should help reducing the digital divide between urban and rural areas. Investments in transport infrastructure, such as railway, tramline, train station and cycling paths, are also expected to have lasting impact on mobility by facilitating transfers between different modes of sustainable transport.

(33)Measures related to health are also expected to bring positive structural change in policies or institutions. In particular, the health reforms are expected to improve the accessibility and quality of health care services and reduce regional disparities in service provision, contributing to better health outcomes.

(32)Structural changes are expected from the implementation of the envisaged reforms. In particular, reforms aiming at fostering the green and digital transitions are expected to have a positive impact on growth potential and economic transformation, through improved efficiency, job creation and productivity growth. The RRP includes reforms aimed at promoting energy efficiency and reducing regulatory barriers for investment in renewables, which are expected to improve market functioning enough to unlock private investments in that area. The reforms focusing on digital public services are expected to contribute to improving the efficiency of public administration further and benefit both citizens and businesses. Reforms aimed at fostering digital skills development are expected to have a lasting impact on the reduction of the skills shortage faced by Estonian companies. Additional measures to reduce the gender pay gap are expected to improve gender equality and economic growth.

(31)In accordance with Article 19(3) point (g), of and Annex V, criterion 2.7, to Regulation (EU) 2021/241, the RRP is expected to have a lasting impact on Estonia to a large extent (Rating A).

(30)Building on Estonia’s position as a frontrunner in the digitalisation of public services, the RRP includes a series of measures aiming at giving new impetus to the digital transformation of the administration. The proposed reforms and investments include the migration of part of the government’s information systems to a secure cloud, the development of new digital solutions ensuring a simplified and more efficient delivery of public services to both citizens and businesses, as well as a reorganisation of the management of information systems and data held by public institutions. An investment supporting the deployment of very high capacity broadband networks in areas of market failure is also expected to reduce the digital divide and ensure that all citizens can take advantage of the envisaged advancements in the delivery of digital public services in Estonia.

(29)The contribution of the RRP to the digital transition focuses mainly on two priorities: the digital transformation of enterprises and the further modernisation of public services. In order to help companies from all sectors, small and medium-sized enterprises in particular, to seize the opportunities offered by digital technologies, the RRP includes the creation of an investment scheme that should provide financial support to companies on different aspects of the digital transformation, from research and development and the development of strategies to the take-up of technologies. This investment is complemented by two measures aiming at addressing the digital transformation of two specific sectors, construction and road freight transport, where the potential of digital technologies has remained insufficiently exploited so far. Moreover, the RRP addresses the key issue of digital skills, through awareness-raising for managers of small- and medium sized enterprises and support for the upskilling and retraining of information and communication technology specialists.

(28)In accordance with Article 19(3), point (f), of and Annex V, criterion 2.6, to Regulation (EU) 2021/241, the RRP contains measures that contribute to a large extent (Rating A) to the digital transition or to addressing the challenges resulting from it. The measures supporting digital objectives account for an amount which represents 21,5% of the RRP’s total allocation calculated in accordance with the methodology set out in Annex VII to that Regulation.

(27)The RRP supports Estonia’s decarbonisation and energy transition objectives, as set out in the National Energy and Climate Plan for 2030, as well as for 2050. The measures in the RRP should support reaching a share of 42% of renewables in gross final consumption of energy, Estonia’s EU target for 2030. Investments into the electricity grid and electricity storage should help Estonia reach this target. In addition, Estonia’s RRP supports at least medium-depth building renovations, representing primary energy savings of at least 30%, which should contribute to Estonia’s 2030 energy efficiency targets and the Long-Term Renovation Strategy. The measures on sustainable transport should support the reduction of pollution from passenger car fleets, thus improve air quality, and incentivise the uptake of sustainable modes of transport, such as rail transport.

(26)The contribution of Estonia’s RRP to the green transition is built on three pillars: green transition in enterprises, sustainable energy and energy efficiency, and sustainable transport. Decarbonisation of the economy is a key challenge for Estonia and the RRP commits the country to a clear pathway with targets and actions for phasing out oil shale in the energy sector to be set in the National Development Plan for the Energy Sector. The RRP incentivises the uptake of renewable energy by removing administrative barriers, reinforcing the grid and facilitating connection to it, as well as piloting energy storage solutions. The RRP should also contribute to introducing green hydrogen technologies in the entire value chain from production to consumption. Increased sustainability in transport should be achieved through creating new connections between various modes of sustainable transport with a focus on rail and active modes of transport such as cycling. The green transition in the business sector should be supported through the development of green technologies, increased low-carbon and climate-neutral research and innovation capabilities and resource efficiency, supporting modernisation and changes in business models in manufacturing companies and improved skills related to the green transition. The RRP has a strong circular economy business angle. The RRP contains no measures having biodiversity as their objective. However, some of the measures for climate mitigation may also be beneficial to the preservation of biodiversity, as climate change is one of the main threats to biodiversity.

(25)In accordance with Article 19(3), point (e), of and Annex V, criterion 2.5, to Regulation (EU) 2021/241, the RRP contains measures that contribute to a large extent (Rating A) to the green transition, including biodiversity, or to addressing the challenges resulting therefrom. The measures supporting climate objectives account for an amount which represents 41,5% of the RRP's total allocation calculated in accordance with the methodology set out in Annex VI to that Regulation. In accordance with Article 17 of that Regulation, the RRP is consistent with the information included in the National Energy and Climate Plan 2021-2030.

(24)For some measures where calls for projects or calls for expressions of interest are necessary to select specific projects in the future or measures providing for financial instruments, such as the Green Fund, the principle of 'do no significant harm' should be complied with by ensuring, in particular through appropriate milestones associated with those measures, that the terms of reference of the calls for projects or calls for expressions of interest prevent activities that could do significant harm to environmental objectives from being selected.

(23)The RRP includes a systematic assessment of each measure against the principle of ‘do no significant harm’ in accordance with the 'Do no significant harm' Technical Guidance of the European Commission (2021/C58/01). The information provided underpins the assessment that measures comply with the principle of 'do no significant harm', for instance by providing detailed explanations of how circular economy considerations should be taken into account for construction projects.

(22)In accordance with Article 19(3), point (d), of and Annex V, criterion 2.4, to Regulation (EU) 2021/241, the RRP is expected to ensure that no measure for the implementation of reforms and investments projects included in the RRP does significant harm to environmental objectives (Rating A) within the meaning of Article 17 of Regulation (EU) 2020/852 of the European Parliament and of the Council (the principle of 'do no significant harm').

(21)The RRP includes measures addressing relevant employment, social and health challenges and is expected to contribute to implementing the European Pillar of Social Rights. Measures to strengthen primary health care, increase the health workforce, improve health infrastructure and the e-health system aim at improving access to health care, thereby helping to address the long-standing challenge of unmet medical needs. The measures addressing youth employment aim at supporting young people to gain work experience, improve their skills and enhance the growth potential of the country. As a result of the measures, the resilience of Estonia’s social and health system is expected to improve.

(20)Measures supporting the green and digital transitions are expected to increase business innovation and research and development, thus providing opportunities for increased productivity, economic competitiveness and job creation, while contributing to achieving structural changes in the economy and laying the groundwork for increased resilience, in line with the updated European industrial strategy. The expected modernisation of the economic structure should be supported by measures promoting green and digital skills to improve the skills levels of the labour force and address Estonia’s long-standing challenge of skills mismatch. The RRP includes support to the construction of high capacity broadband networks, which is expected to contribute to bridging the digital divide between rural and urban areas. The investments incentivising sustainable modes of transport along with improved digital interconnections aim at fostering social and territorial cohesion.

(19)Reforms and investments in renewable energy, sustainable mobility and further digitalisation of public services are expected to bolster sustainable growth and employment over the medium to long term. Measures aimed at developing green technologies, promoting energy efficiency and decarbonisation of the industry, including uptake of emerging new technologies such as green hydrogen, should contribute to decarbonisation and thereby to the resilience of the economy.

(18)Simulations by the Commission services show that the RRP, together with the rest of measures of the European Union Recovery Instrument, has the potential to increase the GDP of Estonia by between 0,9% and 1,3% by 2026, not including the possible positive impact of the structural reforms, which can be substantial.

(17)In accordance with Article 19(3), point (c), of and Annex V, criterion 2.3, to Regulation (EU) 2021/241, the RRP is expected to have a high impact (Rating A) on strengthening the growth potential, job creation and economic, social and institutional resilience of Estonia, contributing to the implementation of the European Pillar of Social Rights, including through the promotion of policies for children and youth, and on mitigating the economic and social impact of the COVID-19 crisis, thereby enhancing the economic, social and territorial cohesion and convergence within the Union.

(16)The RRP provides a basis for further reforms in the social and health area, to address health workforce shortages, improve the quality and access to long-term care for all people with care needs, broaden the coverage of the unemployment benefit and reduce the gender pay gap, in particular by increasing wage transparency. The measures included in the RRP to address the decarbonisation of the economy are mainly related to investments. In terms of reforms, the concrete actions to phase out oil shale are expected to be set out in the National Development Plan of the Energy Sector only at the end of 2025.

(15)Complementary to recent measures on anti-money laundering, the RRP includes a measure aiming at establishing a strategic analysis centre within the Financial Intelligence Unit to allow more operational identification of, response to and prevention of money laundering risks, thus contributing to the reinforcement of the anti-money laundering framework.

(14)Reforms and investments in strengthening primary care, addressing health workforce shortages, modernising e-health governance and improving health infrastructure, including the construction of the Northern Estonia Medical Campus should increase the accessibility and resilience of the health care system. The access to social services is expected to be improved by measures on long-term care, including those modernising and simplifying the support system for children with higher care needs, and by the action plan on the integration of social and health care services. The measures on reducing the gender pay gap should contribute to social cohesion. The investment in supporting young people to gain work experience and improve their skills is expected to contribute to addressing skills shortages, as well as alleviating youth unemployment. The extension of the duration of the unemployment insurance benefit by 60 days in case of adverse labour market conditions contributes to some extent to strengthening the social safety net. The reforms and investments in the health, social and digital areas should also contribute to reducing regional disparities.

(13)The RRP includes measures supporting investments in the green and digital transitions of enterprises, thus contributing to addressing the related country-specific recommendations. Those include notably the development of innovative green technologies, such as green hydrogen, green and digital skills to address the skills shortages and financial support schemes to help Estonian companies, in particular small and medium-sized enterprises, to progress in their digital and green transformation and improve access to finance. The reforms and investments in the area of energy aim at incentivising the uptake of renewable energy, at improving the energy efficiency of buildings and at decarbonising the economy through targets and actions to phase out oil shale. Measures in the transport sector are expected to help reduce emissions and incentivise the uptake of sustainable modes of transport. The reforms include developing interconnected and shared mobility in the Tallinn capital region through a common public transport system and electrifying railways. The RRP is expected to contribute to the development of the cross-border Rail Baltic project, connecting the three Baltic capitals and countries with Poland and the rest of the Union, through investments into railways, tramline, bike- and walkways to stations and the Rail Baltic multimodal terminal.

(12)The RRP includes mutually reinforcing reforms and investments that contribute to addressing to varying degrees all or a significant subset of the economic and social challenges outlined in the country-specific recommendations addressed to Estonia by the Council in the European Semester in 2019 and in 2020, notably those in the areas of green transition, such as energy and resource efficiency, digital transition, such as digital skills and the support to the digitalisation of companies, health care, such as the resilience and accessibility of the health care system, social inclusion, such as access to affordable and integrated social and health services, and anti-money laundering, such as strengthening the analytical capabilities within the anti-money laundering framework.

(11)In accordance with Article 19(3), point (b), of and Annex V, criterion 2.2, to Regulation (EU) 2021/241, the RRP is expected to contribute to effectively addressing all or a significant subset of challenges (Rating A) identified in the relevant country-specific recommendations addressed to Estonia, including fiscal aspects thereof, or challenges identified in other relevant documents officially adopted by the Commission in the context of the European Semester. The recommendations related to the immediate fiscal policy response to the pandemic can be considered to fall outside the scope of Estonia’s RRP, notwithstanding the fact that Estonia has generally responded adequately and sufficiently to the immediate need to support the economy through fiscal means in 2020 and 2021, in line with the general escape clause of the Stability and Growth Pact.

Addressing all or a significant subset of challenges identified in country-specific recommendations

(10)The RRP includes measures aimed at strengthening the country’s health and economic, social and institutional resilience, as described in the fifth pillar. In particular, the RRP focuses directly on improving the resilience and accessibility of the health care system, and it includes measures aimed at improving access to social services in Estonia. The sixth pillar, on policies for the next generation, is supported by measures aimed at helping young people entering the labour force, through a wage subsidy, training allowance, and structural changes in the education and training system to foster information and communication technology skills and increasing the participation and share of women in such trainings and the sector in general.

(9)The RRP is expected to contribute to the improvement of macro-economic performance through the mitigation of the economic and social impact of the COVID-19 crisis, while promoting export competitiveness, innovation and entrepreneurship, through digital and green solutions, thus supporting smart, sustainable and inclusive growth as covered by the third pillar. The fourth pillar, on social and territorial cohesion, is addressed by making public services more accessible through digitalisation, by improving internet connectivity in particular in rural areas, thus aiming at reducing the digital divide, by improving transportation connectivity, as well as by the creation of sustainable jobs and skills in different parts of Estonia.

(8)The RRP includes measures that contribute to all of the six pillars, with each of the six components of the RRP addressing one or more pillars. Such an approach contributes to ensuring that each pillar is comprehensively addressed in a coherent manner. The contribution to the first pillar, dedicated to the green transition, is set to be supported by measures incentivising the use of renewable energy, renovation of buildings to improve their energy efficiency, as well as better public transport connectivity and incentivising the uptake of green hydrogen and generally supporting the acceleration of the green transition in enterprises, including skills required for that transition. Investments and reforms geared towards the digitalisation of the public sector and businesses as well as the improvement of the level of digital skills are all expected to contribute to achieving the objective of the second pillar, which is dedicated to digital transformation.

(7)In accordance with Article 19(3), point (a), of and Annex V, criterion 2.1, to Regulation (EU) 2021/241, the RRP represents to a large extent (Rating A) a comprehensive and adequately balanced response to the economic and social situation, thereby contributing appropriately to all of the six pillars referred to in Article 3 of that Regulation, taking the specific challenges faced by and the financial allocation for the Member State concerned into account.

(6)The implementation of the Member States' RRPs will constitute a coordinated effort involving reforms and investments across the Union. Through coordinated and simultaneous implementation and the implementation of cross-border and multi-country projects, such reforms and investments will mutually reinforce each other and generate positive spillovers across the Union. Therefore, about one third of the impact of the Facility on Member States' growth and job creation will come from spillovers from other Member States.

(5)The RRPs should pursue the general objectives of the Recovery and Resilience Facility established by Regulation (EU) 2021/241 (the 'Facility') and of the European Union Recovery Instrument set up by Council Regulation (EU) 2020/2094 in order to support the recovery in the aftermath of the COVID-19 crisis. They should promote the Union's economic, social and territorial cohesion by contributing to the six pillars referred to in Article 3 of Regulation (EU) 2021/241.

(4)On 18 June, Estonia submitted its national RRP to the Commission, in accordance with Article 18(1) of Regulation (EU) 2021/241. That submission followed a consultation process, conducted in accordance with the national legal framework, involving local and regional authorities, social partners, civil society organisations, youth organisations and other relevant stakeholders. National ownership of the RRPs underpins their successful implementation and lasting impact at national level and credibility at European level. Pursuant to Article 19 of Regulation (EU) 2021/241, the Commission has assessed the relevance, effectiveness, efficiency and coherence of RRP, in accordance with the assessment guidelines set out in Annex V to that Regulation.

(3)The Council Recommendation on the economic policy of the euro area recommended to euro area Member States to take action, including through their RRPs, to, inter alia, ensure a policy stance which supports the recovery and to further improve convergence, resilience and sustainable and inclusive growth. The Council Recommendation also recommended euro area Member States to strengthen national institutional frameworks, to ensure macro-financial stability, to complete the economic and monetary union and to strengthen the international role of the euro.

(2)On 9 July 2019 and on 20 July 2020, the Council addressed recommendations to Estonia in the context of the European Semester. In particular, the Council recommended Estonia to improve the adequacy of the social safety net, including by broadening the coverage of unemployment benefits, and access to affordable and integrated social services, and to take measures to reduce the gender pay gap, including by improving wage transparency. It also recommended to improve the accessibility and resilience of the health system, including by addressing the shortages of health workers, strengthening primary care and ensuring the supply of critical medical products. Moreover, it recommended to address skills shortages and foster innovation by improving the capacity and labour market relevance of the education and training system. It was also recommended to Estonia to focus investments on the green and digital transition, in particular on digitalisation of companies, research and innovation, including supporting the innovation capacity of small and medium-sized enterprises, clean and efficient production and use of energy, resource efficiency and sustainable transport, contributing to a progressive decarbonisation of the economy. In addition, the Council recommended to ensure sufficient access to finance and to step up efforts to ensure the effective supervision and enforcement of the anti-money laundering framework. Finally, to tackle the COVID-19 crisis, it was recommended to Estonia to take all necessary measures to effectively address the pandemic, sustain the economy and, when economic conditions allow, to pursue fiscal policies aimed at achieving prudent medium-term fiscal positions and ensuring debt sustainability, while enhancing investment. Having assessed progress in the implementation of those country-specific recommendations at the time of submission of the recovery and resilience plan ('RRP'), the Commission finds that the recommendation on taking all necessary measures to effectively address the pandemic, sustain the economy and support the ensuing recovery has been fully implemented. Furthermore, it finds that substantial progress has been achieved with respect to the recommendations to focus investment on energy interconnections.

(1)The COVID-19 outbreak has had a disruptive impact on the economy of Estonia. In 2019, the gross domestic product (GDP) per capita of Estonia was 67% of the Union average. According to the Commission’s summer 2021 forecast, the real GDP of Estonia declined by 2,9% in 2020, but is expected to increase by 1,8% cumulatively in 2020 and 2021. Long standing aspects with an impact on medium-term economic performance include population ageing, regional and social disparities, relatively low resource productivity and high intensity of greenhouse gas emissions.

Having regard to the proposal from the European Commission,

Having regard to Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility and in particular Article 20 thereof,

Having regard to the Treaty on the Functioning of the European Union,

on the approval of the assessment of the recovery and resilience plan for Estonia

on the approval of the assessment of the recovery and resilience plan for Estonia

EUROPEAN COMMISSION Brussels, 5.10.2021 COM(2021) 625 final ANNEX

to the Proposal for a Council Implementing Decision on the approval of the assessment of the recovery and resilience plan for Estonia {SWD(2021) 285 final}



ANNEX SECTION 1: REFORMS AND INVESTMENTS UNDER THE RECOVERY AND RESILIENCE PLAN 1.Description of Reforms and Investments A. COMPONENT 1: Digital transformation of enterprises The objective of this component of the Estonian recovery and resilience plan is to foster the digital transformation of Estonian companies and their competitiveness, in particular on export markets. It shall provide financial support to companies of all sectors, with a focus on SMEs and micro-enterprises, at different stages of their digital transformation, as well as specific contributions to the adoption and deployment of digital solutions in the construction and road freight transport sectors. Moreover, the component shall address the key issue of digital skills, through awareness-raising of SME managers and support to the upskilling and retraining of specialists in information and communication technologies (ICT). Actions aimed at supporting the identification of export opportunities and the promotion of Estonian companies abroad shall be carried out in synergy with the activities of Enterprise Estonia. The component supports addressing the Country Specific Recommendations on investment in the digital transition (Country Specific Recommendation 3 in 2020) and on skills shortages (Country Specific Recommendation 2 in 2019). It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the ‘Do no significant harm’ Technical Guidance (2021/C58/01). A.1. Description of the reforms and investments for non-repayable financial support 1.1.Investment: Digital transformation in enterprises The objective of the measure is to foster the digital transformation of businesses with a particular focus on SMEs and micro-enterprises. The measure consists in providing financial support to SMEs and micro-enterprises located in Estonia from all sectors for activities and investments relevant to their digital transformation. This financial support, which shall be complemented with the companies’ own resources, shall cover one or several of the following aspects: -the adoption of digital technologies, -the development of industrial data clouds, -industrial research, development, testing and piloting activities, -feasibility studies, advisory and support services,

-training of staff. The funding shall be allocated through open calls for proposals. In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for the calls for proposals shall exclude the following list of activities: (i) activities related to fossil fuels, including downstream use ; (ii) activities under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks ; (iii) activities related to waste landfills, incinerators and mechanical biological treatment plants ; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation may be selected. The implementation of the measure shall be completed by 31 December 2025. 1.2.Investment: Development of e-construction The objective of the measure is to contribute to the acceleration of the digital transformation of the construction sector in order to increase its productivity, reduce its environmental footprint and improve the quality of buildings. This investment is also expected to foster a wider and more efficient sharing of data among stakeholders. The measure consists of three different strands: (I)the development of software interfaces between the national e-construction platform (which is being developed under the responsibility of the Construction and Housing Department of the Ministry of Economic Affairs and Communications) and existing public and private information systems used in the sector, in order to, inter alia, automate the verifications of the compliance of buildings with various regulatory requirements, as well as the delivery of certificates and authorisations; this includes the training of users of the e-construction platform (including the development of training material); (II)the support to the introduction of international standards and best practices in relation to the digitalisation of construction and building maintenance, including through the introduction of a construction data classification system, the creation of a database on construction materials and construction products, the introduction of BIM (Building Information Modelling) in the field of property maintenance; (III) the support to projects (selected through open calls for proposals) aiming at implementing digital construction tools and developing (also prototyping) innovative private and public services connected to the national e-construction platform. The implementation of the measure shall be completed by 31 December 2025. 1.3.Investment: Development of digital waybills services The objective of the measure is to support the digitalisation of the exchange of information in road freight transport through the introduction of digital waybills, in accordance with the Regulation (EU) 2020/1056 on electronic freight transport information (eFTI), thus contributing to the smooth functioning of the internal market. The measure consists in supporting: (I)service providers in the establishment of eFTI platforms to enable the deployment of digital waybills (eCMR - electronic Consignment Note), (II)transport and logistics enterprises in the interfacing of their systems and processes with the eFTI platforms, enabling them to use digital waybills (eCMR). The corresponding projects shall be selected through two distinct calls for proposals. The implementation of the measure shall be completed by 30 June 2026.

1.4.Reform: Skills reform for the digital transformation of businesses The objective of the reform is to contribute to strengthening the capacity of businesses at management level to steer and foster the digital transition, as well as to ensuring the availability of sufficient ICT professionals possessing up-to-date skills and knowledge, so that Estonian companies can fully seize the opportunities offered by the digital transition. It also aims at offering new career opportunities to both employed and unemployed people through upskilling and retraining in ICT, as well as through a better recognition of skills acquired outside formal learning. The measure also aims to contribute to increasing the participation of women in ICT training and ICT professions. The measure consists of the four following strands: (I)the training of managers in companies (SMEs in particular), in order to increase their ICT skills and knowledge, and raise their awareness about the potential gains from the use of ICT, (II)a revision of the content and organisation of the training of ICT experts, taking into account the latest technological developments, the growing importance of cybersecurity and the needs of companies, (III) a pilot for the redesign of the qualification framework for ICT specialists, (IV) the upskilling and retraining of ICT specialists, including in cybersecurity. The implementation of the measure shall be completed by 30 June 2026.



1.5.Reform: Supporting the competitiveness of enterprises in foreign markets The objective of the measure is to increase the export capacity and competitiveness of Estonian companies, including notably those of the ICT sector. The measure is expected to be particularly relevant for SMEs. It shall also take advantage of the possibilities offered by digital tools. The measure consists of three sub-measures: (I)the development of export strategies aimed at specific countries or regions; (II)the establishment of business centres located in key export markets; (III) the promotion of Estonian products and services (from the ICT sector in particular) through physical, virtual or hybrid missions and events. The implementation of the measure shall be completed by 30 June 2026. 1.5.1.Sub-reform: Country and regional strategies This sub-reform consists in the development of a series of comprehensive export strategies addressing key target countries and regions, i.e. those which represent a high growth potential for Estonian companies. They shall include specific chapters on export opportunities for the ICT sector and, more broadly, digital solutions developed in different application areas (such as governance, education or transport).

These strategies aim at providing advice to companies entering or already operating in the concerned markets. The countries and regions to be addressed by the strategies shall be identified through an analysis to be carried out as part of the implementation of this sub-measure. The implementation of this measure shall be carried out in synergy with the activities of Enterprise Estonia, among other partners. 1.5.2.Sub-reform: Innovative business centres in key export markets This sub-reform consists in establishing business centres in seven foreign countries (inside and/or outside the Union) considered as important export markets. These business centres shall contain suitable equipment for physical, virtual as well as hybrid meetings, receptions and presentations which will be organised by Estonian enterprises across all sectors targeting the particular market. That equipment can also be used outside events, for introduction to any potential client of a cluster or a particular enterprise in Estonia. The business centres shall contribute to the promotion of Estonian companies, support them locally in their export activities, and help attract foreign investors. The activities of the business centres shall be carried out in synergy with the activities of Enterprise Estonia, among other partners. The location of the business centres shall be identified after an analysis to be carried out as part of the implementation of this sub-measure. 1.5.3.Sub-reform: Global e-export impact groups and virtual stages This sub-reform consists in setting up groups of representatives of both public authorities and other stakeholders, including notably private companies, and supporting the promotion of Estonian products and services (from the ICT sector in particular) by these groups, through missions and participation in physical, virtual or hybrid events. The implementation of this sub-reform also includes the reinforcement of the promotion of Estonian products and services at major events with the use of digital tools. The so-called ‘virtual stages’ shall create more opportunities of participation for Estonian stakeholders and showcase Estonian digital solutions. These ‘virtual stages’ shall consist of technical solutions combining physical and digital elements to enable either an export-related event in Estonia to reach global audiences, or Estonian exporters to participate in global events organised abroad. The implementation of this measure shall be carried out in synergy with the activities of Enterprise Estonia, among other partners. A.2. Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support Sequential Number Related Measure (Reform or Investment) Milestone / Target Name Qualitative indicators

(for milestones) Quantitative indicators

(for targets) Indicative timeline for completion Description of each milestone and target Unit of measure Baseline Goal Quarter Year 1 1.1 Digital transformation in enterprises Milestone Call for proposals with award criteria and award conditions Publication of the notice of the call for proposals Q2 2022 A call for proposals to support the digital transformation of businesses, together with the award criteria, shall be published by the Ministry of Economic Affairs and Communications. The evaluation criteria and the conditions for granting support shall be defined on the basis of an analysis of the needs of Estonian companies and the expected impact of the measure. Eligibility criteria shall also ensure that the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. 2 1.1 Digital transformation in enterprises Target Award of grants Number of enterprises being awarded a grant 0 110 Q4 2023 Number of enterprises to which grants shall be awarded by the Ministry of Economic Affairs and Communications to support their digital transformation in accordance with the call for proposals. 3 1.1 Digital transformation in enterprises Target Award of grants Number of enterprises being awarded a grant 110 230 Q4 2025 Number of enterprises to which grants shall be awarded by the Ministry of Economic Affairs and Communications to support their digital transformation in accordance with the call for proposals. 4 1.2 Development of e-construction Milestone Adoption of international standards and best practices for the use of digital technologies in construction Adoption of international standards and best practices Q4 2024 The work on the adoption of international standards and best practices for the use of digital technologies in construction and the management of buildings shall be led and co-ordinated by the Ministry of Economic Affairs and Communications, with the introduction of a construction data classification system, the creation of a publicly available database for construction materials and construction products and the introduction of building information modelling in the field of property maintenance. 5 1.2 Development of e-construction Milestone Availability of public services on the e-construction platform Entry into service of interfaces between the e-construction platform and the related public services Q4 2025 The public services provided for in the e-construction development plan shall be developed, operational and made public on the e-construction platform. Training material shall also be made available to users. This includes services related to the built environment – such as building and planning permits, building registry (logbook), and the renovation passport. 6 1.2 Development of e-construction Target Completion of development and prototyping projects Number of projects completed 0 120 Q4 2025 Number of completed projects for development and/or implementation of digital construction tools and prototypes of innovative digital solutions drawing on the e-construction platform. 7 1.3 Development of digital waybills services Target eFTI (electronic Freight Transport Information) platforms development Number of projects launched 0 5 Q2 2023 Number of projects developing an eFTI platform which have received a positive grant decision. 8 1.3 Development of digital waybills services Target eCMR (electronic Consignment Note) interface developments Number of projects launched 0 270 Q4 2024 Number of projects enabling transport and logistics operators to be connected to eFTI platforms and use eCMR which have received a positive grant decision. 9 1.3 Development of digital waybills services Target Total number of projects completed Number of projects completed 0 275 Q4 2025 Number of eFTI and eCMR projects completed, contributing to the deployment of digital waybills. 10 1.3 Development of digital waybills services Milestone Ex-post evaluation of the development and deployment of the digital waybills Adoption of ex-post evaluation report by the Ministry of Economic Affairs and Communications Q2 2026 An external body shall analyse the impact of the support measure on the road freight transport sector and deliver an evaluation report, which shall be adopted by the Ministry of Economic Affairs and Communications. 11 1.4 Skills reform for the digital transformation of businesses Milestone Entry into force of secondary legislation setting out the terms of support for the development of digital skills Entry into force of secondary legislation Q2 2022 The secondary legislation necessary for the application and allocation of support shall enter into force. The conditions for support shall be established through a ministerial decree, which shall be coordinated with the Ministry of Finance and the State Shared Service Centre.

The ministerial decree shall consist of the following elements: - objective of the measure, - description of supported activities, - beneficiaries and target groups, - conditions for implementation, - eligible costs and used simplifications , - conditions for payments, - conditions for reporting and monitoring. 12 1.4 Skills reform for the digital transformation of businesses Target Enrolment in training activities Number of participants 0 500 Q4 2023 Number of people enrolled in training activities supported under this measure, consisting of awareness-raising for SME managers, and upskilling and retraining for ICT specialists. A minimum of 35% of participants enrolled in these training activities shall be women. 13 1.4 Skills reform for the digital transformation of businesses Target Completion of training activities Number of participants 0 2000 Q2 2026 Number of people having completed their training course through the training activities supported under this measure, including awareness-raising for SME managers, and upskilling and retraining for ICT specialists. A minimum of 35% of participants having completed these training activities shall be women. 14 1.4 Skills reform for the digital transformation of businesses Target Number of new upskilling and retraining modules Number of curricula registered in Estonia’sEducation Information System (EHIS). 0 5 Q4 2023 Number of upskilling and retraining modules developed with detailed training content, structure and training materials to provide training related to digital skills. New curricula developed for these modules shall be registered in Estonia’s Education Information System (EHIS). 15 1.4 Skills reform for the digital transformation of businesses Target Review of qualification standards for ICT specialists. Number of qualification standards analysed and adapted as and if needed 0 5 Q4 2024 Number of established qualification standards for ICT specialists from the national register of qualification standards which have been analysed and adapted as and if needed. 16 1.5 Supporting the competitiveness of enterprises in foreign markets 1.5.1 Country and regional strategies Milestone Preparation of the development of strategies Completion of preparatory tasks Q2 2022 The preparatory tasks needed to draw up export strategies shall be completed. These tasks include: - an analysis of which external markets are important to develop strategies, - an analysis of the interests of businesses, - a mapping of the needs of exporting enterprises to increase their competitiveness on export markets, the ranking of the needs. 17 1.5 Supporting the competitiveness of enterprises in foreign markets 1.5.1 Country and regional strategies Milestone Procurement of studies Signature of contracts Q2 2024 Tenders for drawing up strategies and product packages with a view to obtaining detailed market information on foreign markets shall be carried out by the Ministry of Foreign Affairs. The corresponding contracts shall be signed. 18 1.5 Supporting the competitiveness of enterprises in foreign markets 1.5.1 Country and regional strategies Target Number of country and regional export strategies Number of strategies published 0 13 Q2 2026 Number of national and/or regional export strategies which shall be developed. These strategies shall contain comprehensive analyses and provide pro-active smart advice for companies entering and operating in foreign markets. 19 1.5 Supporting the competitiveness of enterprises in foreign markets 1.5.2 Innovative business centres in key export markets Milestone Preparatory analysis to define the content and the locations of business centres Delivery of a preparatory analysis Q2 2022 A preparatory analysis allowing the definition of the content and the locations of the business centres shall be prepared by the Ministry of Foreign Affairs. The analysis shall reveal where to set up business centres to increase demand for Estonian-made products and services in export markets. 20 1.5 Supporting the competitiveness of enterprises in foreign markets 1.5.2 Innovative business centres in key export markets Target Number of business centres opened Number of business centres 0 7 Q2 2026 Number of business centres opened by the Ministry of Foreign Affairs to support companies in entering and operating in important export markets, as well as to help them to promote Estonian-made products and services in a way that takes into account the specificities of local business environment and culture. 21 1.5 Supporting the competitiveness of enterprises in foreign markets 1.5.3 Global e-export impact groups and virtual stages Milestone Setting-up of impact groups and selection of destinations for global digital missions Decisions on the composition of the impact groups and the destinations of the global digital missions Q2 2022 Based on an analysis, the Ministry of Foreign Affairs shall select global digital mission destinations and impact groups to increase the added value of Estonian digital services exports, increase the export capacity of Estonian companies, among which ICT companies in particular, and attract additional foreign investments for innovation. 22 1.5 Supporting the competitiveness of enterprises in foreign markets 1.5.3 Global e-export impact groups and virtual stages Target Number of missions carried out by the global impact groups and number of major events in which Estonia was represented through ‘virtual stages’ Total of number of missions and events carried out 0 29 Q2 2026 At least 14 missions shall be carried out by the global impact groups set up by the Ministry of Foreign Affairs to increase the added value of Estonian digital services exports, increase the export capacity of Estonian companies, among which ICT companies in particular, and attract additional foreign investments for innovation. Estonia shall be represented through ‘virtual stages’ in at least 15 events. B. COMPONENT 2: Accelerating the green transition in enterprises B.1. Description of the reforms and investments for non-repayable financial support The objective of the component of the Estonian recover and resilience plan is to speed up the green transition in the business sector in Estonia and to seize the business opportunities it represents. The component consists of two reforms and six investments and aims to support the development of green technologies, increase green R&D and innovation capabilities and resource efficiency, introduce new business models and improve skills and expertise in fields related to the green transition. The measures under this component aim for a comprehensive approach to the green transition addressing key market failures and facilitating the technological and behavioural break-through to increase the competitiveness of the business sector. The measures also support further development of the capital market and business environment. The component supports addressing the Country Specific Recommendations on supporting the innovation capacity of small and medium-sized enterprises and focussing investment on the green transition, ensuring sufficient access to finance (Country Specific Recommendation 3 in 2020), and on skills shortages (Country Specific Recommendation 2 in 2019). It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the ‘Do no significant harm’ Technical Guidance (2021/C58/01).

2.1.Reform: Green transition of enterprises The objective of the reform is to improve the green transition in the business sector, which is expected to have economic, environmental and social benefits by making existing businesses more efficient and environmentally friendly (resource efficiency, new green transition certificates and market authorisations for products) and by supporting the emergence of new green technology companies (development and deployment of green technologies, new opportunities for the valorisation of bio-resources). The reform shall consist of the set-up of a broad-based Green Transition Task Force to foster cooperation between the green technology stakeholders and the adoption of legislation necessary for the implementation of the five complementary investments: 1. Green skills to support the green transition of companies; 2. Green technology development programmes; 3 Modernisation of the business models in manufacturing companies; 4. Deployment of resource efficient green technologies; and 5. Green Fund. The reform is interlinked with Component 1 as digitalisation and automation are contributing to the development of green technologies and green transition in the business sector. The implementation of the reform shall be completed by 31 December 2022. 2.2.Investment: Green skills to support the green transition of enterprises The objective of the investment is to ensure the availability of high-quality expertise to implement the green transition in enterprises. The investment consists of the introduction of up-to-date upskilling and retraining programmes for adults and the modernisation of study programmes in higher and vocational education, as well as the development and piloting more flexible training programmes offering micro credentials, taking into account future needs of the green economy. Green skills are defined as skills needed for jobs that contribute to the reduction of greenhouse gas emissions, improving energy and resource efficiency and include a wider introduction of circular economy principles. In cooperation with stakeholders, professional standards and skills profiles shall be updated and, where appropriate, new profiles shall be developed, specifying the expected learning outcomes and selecting specific areas with the greatest impact on the green transition. Retraining opportunities shall be provided to people working in sectors already affected by the green transition (energy, transport, waste management; new industries and sectors with a potential for creation of jobs stemming from or linked to the green transition) and to those wishing to change their career. The implementation of the investment shall be completed by 30 June 2026. 2.3.Investment: Green technology development programmes The investment aims to contribute to the green transition of the companies by fostering the development and spreading of innovative green technologies. The investment is expected to increase the number of research-intensive green technology companies in the market and support the start-up ecosystem. The investment consists of support to start-ups and development clusters with a focus on integrated green technology solutions through various development services (including accelerators, incubation, business development, prototype development, piloting) and improvement of the cooperation between different types of organisations and actors that are already active on the market (academia, businesses, other stakeholders). The focus of the investment shall be on energy and resource efficiency, promoting the circular economy, new business models, digitalisation and automation. The projects supported under the investment shall contribute to reducing greenhouse gas emissions and increasing resource productivity in Estonia. The implementation of the investment shall be completed by 30 June 2026. 2.4.Investment: Modernisation of the business models in manufacturing companies The objective of the investment is to support the change of business models in manufacturing to ensure the compliance of Estonian products with environmental and climate objectives, including with circular economy principles, and raise competitiveness of manufacturing companies. The measure shall support projects modernising the business models of manufacturing companies related to climate and environmental objectives. The projects shall be selected on the basis of a call for proposals. In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for the call for proposals shall exclude the following list of activities: (i) activities related to fossil fuels, including downstream use ; (ii) activities under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks ; (iii) activities related to waste landfills, incinerators and mechanical biological treatment plants ; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation may be selected.

The implementation of the investment shall be completed by 31 December 2025. 2.5.Investment: Deployment of resource-efficient green technologies The objective of the investment is to improve the resource efficiency of companies, including energy efficiency, with a particular focus on the valorisation of underutilised bio-resources such as residues and by-products. The investment aims to support innovation in production technology and product development in enterprises and contributes to circular economy solutions. The measure shall support two kinds of investments: -promoting resource-efficient green technologies for industrial plants; -valorisation of bio-resources. The projects shall be selected on the basis of a call for proposals. The main criteria for selecting projects to receive a grant shall include, according to relevance, efficiency in reducing greenhouse gas emissions, resource efficiency, cost-effectiveness, reducing of residues and waste generation, added value to bio-resources and innovativeness of the solutions to be developed. In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for the call for proposals shall exclude the following list of activities: (i) activities related to fossil fuels, including downstream use ; (ii) activities under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks ; (iii) activities related to waste landfills, incinerators and mechanical biological treatment plants ; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation may be selected. The implementation of the investment shall be completed by 30 June 2026. 2.6.Investment: Green Fund The objective of the investment is to provide capital for the development of new green technologies in strategic areas such as energy, agriculture, food industry, transport and logistics, materials and chemical industries. The Green Fund shall provide funding for companies and sectors whose products, services or processes are characterised by research-intensive green technologies and whose activities contribute to solving environmental problems, developing new products, services or technologies that reduce or capture greenhouse gas emissions or are driven by eco-design requirements. Investments shall be made in sustainable projects, taking into account the EU Taxonomy Regulation. The measure shall be implemented as a financial instrument as part of a broader green technology investment programme that provides equity investments to companies in the form of direct equity investments and through venture capital funds, managed by the public fund manager SmartCap. The measure shall comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01). The legal agreement signed between Estonia and SmartCap and the subsequent investment policy of the Green Fund shall: I.require the application of the Commission’s technical guidance on sustainability proofing for the InvestEU Fund; and II.require companies that derived more than 50% of their revenues during the preceding financial year from the following activities and/or assets to adopt and publish green transition plans: (i) activities and assets related to fossil fuels, including downstream use ; (ii) activities and assets under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks ; (iii) activities and assets related to waste landfills, incinerators and mechanical biological treatment plants ; and (iv) activities and assets where the long-term disposal of waste may cause harm to the environment; and III.require the verification of legal compliance with the relevant EU and national environmental legislation of the beneficiary by SmartCap for all transactions, including those exempted from sustainability proofing. The implementation of the investment shall be completed by 30 June 2026. 2.7.Investment: Creating opportunities for the uptake of renewables-based green hydrogen technologies

The objective of the investment is to support the deployment and piloting of hydrogen integrated value chains from energy production and supply solutions to final consumption in different application areas. The projects to be supported shall be selected following a call for proposals. The call for proposals is open for projects from all economic sectors. The electricity used to produce hydrogen must be produced from renewable energy and the consumption of green hydrogen shall take place in Estonia. In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for the call for proposals shall exclude the following list of activities: (i) activities related to fossil fuels, including downstream use ; (ii) activities under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks ; (iii) activities related to waste landfills, incinerators and mechanical biological treatment plants ; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation may be selected. The implementation of the investment shall be completed by 30 June 2026. B.2. Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support Sequential Number Related Measure (Reform or Investment) Milestone / Target Name Qualitative indicators

(for milestones) Unit of measure Quantitative indicators

(for targets) Indicative timeline for completion Description of each milestone and target Baseline Goal Quarter Year 23 2.1 Green transition of enterprises Milestone Creation of a Green Transition Task Force to implement and monitor the green transition Set up of a task force and working groups <<<<<<<<<<<<<<<<< Q4 2021 The Ministry of the Environment shall reform the existing Working Group on Green Technology (set up in 2020) into the RRP’s Green Transition Task Force to coordinate the measures on the green transition of companies, and improve cooperation and exchange of information among the public sector, stakeholders and interest groups. The necessary working groups shall be set up for specific measures. 24 2.1 Green transition of enterprises Milestone Adoption of the Circular Economy Action Plan by the Green Transition Task Force Circular Economy Action Plan adopted Q4 2022 The Green Transition Task Force shall review the existing Circular Economy activities and different action plans into a single Circular Economy Action Plan that will lead the Estonian transition to Circular Economy. 25 2.2 Green skills to support the green transition of enterprises Milestone Entry into force of secondary legislation setting out the terms of support for the development of green skills Entry into force of secondary legislation Q2 2022 The secondary legislation necessary for the application and allocation of support shall enter into force. It shall contain provisions ensuring that any action supported under this measure is focused on areas contributing to the reduction of greenhouse gas emissions or the adaptation to climate change. 26 2.2 Green skills to support the green transition of enterprises Target Number of upskilling and retraining modules Number of modules 0 5 Q4 2023 Number of upskilling and retraining modules developed including detailed training content, structure and training materials to provide training related to green skills. 27 2.2 Green skills to support the green transition of enterprises Target People taking part in upskilling and retraining programmes Number of participants 0 2830 Q2 2026 Number of people having completed one of the training courses supported through this measure. 28 2.3 Green technologies development programme Milestone Establishment of a working group to plan and set up the development programme Recruitment of a project manager and set up of a working group Q4 2021 A project manager shall be recruited and a broad-based group of stakeholders shall be set up to coordinate investment planning and implementation. The role of the project manager shall be set out to gather information from market participants and design the necessary support measures and procurement. The working group shall be composed of parties involved in the development of entrepreneurship and shall undertake to meet at least three times a year to take stock of developments in investment-related activities and provide recommendations for further action. The working group shall draw up provisions related to the selection of actions to be supported under the development programme in such a way that it is ensured that each action directly contributes either to lowering greenhouse gas emissions or supporting adaptation to climate change. 29 2.3 Green technologies development programme Milestone Set up of the Green Technologies Development Programme Contracts signed for all development clusters and support measures designed and opened Q2 2024 The public procurement processes for at least 5 development clusters shall be completed and the contracts shall be awarded to the winning parties. Support measures shall be designed and their first rounds shall be opened to at least 10 start-ups. The selection processes shall ensure that each supported action directly contributes either to lowering greenhouse gas emissions or supporting adaptation to climate change. 30 2.3 Green technologies development programme Target Number of clusters supported through the Green Technology Development Programme Number of clusters 0 5 Q2 2026 Number of clusters supported by the development programme. 31 2.3 Green technologies development programme Target Number of start-ups supported through the Green Technology Development Programme and which have received private investment Number of start-ups 0 10 Q2 2026 Number of start-ups supported by the development programme and which have received resources from private investors during or after the development programme. 32 2.4 Modernisation of the business models in manufacturing companies Milestone Entry into force of the ministerial decree setting out the terms and conditions of grant eligibility Entry into force of the ministerial decree Q2 2022 The conditions for granting support shall be enacted by a decree of the responsible minister. The requirements set shall include eligibility criteria to ensure that the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) by means of an exclusion list and compliance with relevant EU and national environmental legislation. The selection/eligibility criteria shall specify that the supported activities and/or enterprises contribute to a climate-neutral economy, resilience and climate change adaptation including circular economy objectives such as in-house implementation of circular economy principles, transfer of transport and storage of companies to new foundations. 33 2.4 Modernisation of the business models in manufacturing companies Target Number of projects supported Number of projects 0 70 Q4 2025 Projects having received a grant disbursement in accordance with the eligibility conditions set out in the call for proposals to introduce business models that support the transition to a climate-neutral economy, resilience and adaptation to climate change, including circular economy objectives. 34 2.5 Deployment of resource-efficient green technologies Milestone Publication of call for proposals for grants Publication of the notice for calls for proposals for grants Q2 2022 Call for proposals to support resource-efficient green technologies and the valorisation of bio-resources shall be published and open for applications, including eligibility criteria to ensure that the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) by means of an exclusion list and compliance with relevant EU and national environmental legislation. The selection/eligibility criteria shall specify that the supported activities and/or enterprises contribute to a climate-neutral economy, resilience and climate change adaptation 35 2.5 Deployment of resource-efficient green technologies Target Number of contracts awarded following the call for proposals Contracts awarded 0 25 Q4 2023 Award of the contracts to at least 25 projects selected under the competitive call for proposals, for green technologies for industrial plants and for valorisation of bio-resources, in compliance with the terms of reference 36 2.5 Deployment of resource-efficient green technologies Target Number of projects completed Number of projects 0 25 Q2 2026 Number of completed projects to improve resource efficiency through the enhancement of green technologies and bio-resources, on the basis of calls for proposals and established eligibility criteria. 37 2.6 Green Fund Milestone Signature of contractual agreement between the Ministry of Economic Affairs and Communications and SmartCap Signature of contractual agreement Q4 2021 A contractual agreement shall be signed between the Ministry of Economic Affairs and Communications and SmartCap to manage the Green Fund, which shall contain: - Investment objectives to invest in enterprises and activities contributing to a climate-neutral economy and to improving resilience to climate change, including awareness-raising measures, - Eligibility criteria for compliance with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) of supported beneficiaries through the use of sustainability proofing, an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. 38 2.6 Green Fund Milestone Adoption of the investment policy document by SmartCap Investment policy document adopted by SmartCap Q4 2021 SmartCap shall adopt the investment policy for the Green Fund, in line with the contractual agreement signed between the Ministry of Economic Affairs and Communications and SmartCap, including the investment objectives and the eligibility criteria to ensure compliance with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) of supported beneficiaries under this measure through the use of sustainability proofing, the requirement of compliance with the relevant EU and national environmental legislation, and the requirement for beneficiaries that derived more than 50% of their revenues during the preceding financial year from activities or assets in the exclusion list to adopt and publish green transition plans. 39 2.6 Green Fund Target Volume of investments in venture capital funds or equity investments in enterprises Volume of invested capital (in EUR) 0 60 000 000 Q4 2024 At least EUR 60 million shall be invested by the Green Fund in venture capital funds or enterprises in line with the investment policy. 40 2.6 Green Fund Target Volume of investments in venture capital funds or equity investments in enterprises Volume of invested capital (in EUR) 60 000 000 100 000 000 Q2 2026 At least EUR 100 million shall be invested by the Green Fund in venture capital funds or enterprises in line with the investment policy. 41 2.7 Creating opportunities for the uptake of renewables-based green hydrogen technologies Milestone Entry into force of the ministerial decree setting out the terms and conditions for granting support Entry into force of the ministerial decree Q4 2022 Development of project selection criteria, and entry into force of the ministerial decree on the conditions for granting support for projects related to integrated green hydrogen technologies. The terms of reference for this support shall include eligibility criteria that ensure that the objectives of the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. 42 2.7 Creating opportunities for the uptake of renewables-based green hydrogen technologies Milestone Technologies and equipment to create complete green hydrogen value chains Procurement, installation and start of operation of technologies and equipment Q1 2025 The necessary equipment for green hydrogen production shall be purchased, installed and put in operation by project promoters selected in the call for proposals. 43 2.7 Creating opportunities for the uptake of renewables-based green hydrogen technologies Target Grants allocated to renewables-based green hydrogen technologies representing at least EUR 49.49 million EUR 0 49 490 000 Q2 2026 Grants shall be allocated to investments in renewables based green hydrogen technologies in line with the investment policy, representing at least EUR 49.49 million C. COMPONENT 3: Digital State Building on the successful deployment of digital technologies for the delivery of public services in Estonia over the last years, this component of the Estonian recovery and resilience plan aims at upgrading the digital government services further, in particular in terms of user-centricity and resilience (including in light of the growing cybersecurity threats). The component features measures allowing to take advantage of the opportunities offered by the latest technologies, especially artificial intelligence, but also significant redesigns of both front-end and back-end services. They shall benefit both citizens and businesses. Specific actions are foreseen in order to reinforce the country’s capacities to combat money laundering. The support to the deployment of very high capacity networks in rural areas is also expected to ensure wider access to online services and, more generally, contribute to the further digital transformation of the country. The component supports addressing the Country Specific Recommendations on investment in the digital transition (Country Specific Recommendation 3 in 2020) and on the anti-money laundering framework (Country Specific Recommendation 1 in 2019 and Country Specific Recommendation 4 in 2020). It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the ‘Do no significant harm’ Technical Guidance (2021/C58/01). C.1. Description of the reforms and investments for non-repayable financial support 3.1.Reform: Creation and development of a centre of excellence for data governance and open data The objective of the measure is to foster a better management of the data collected and held by the Estonian public authorities. It aims at improving the quality of the data, increase its use for decision-making as well as its availability as open data, so that it may also be reused by other stakeholders. The measure consists of: -the creation of a centre of excellence within Statistics Estonia (the Estonian government agency responsible for producing official statistics) to coordinate and support the development of data governance in other public authorities, -the development of data governance and data sharing tools/information systems, -the implementation of projects aiming at improving the quality of data held by public authorities and increasing the availability of open data. The implementation of the measure shall be completed by 31 December 2025.

3.2.Reform: Development of event services and proactive digital public services for individuals The objective of the measure is to improve the efficiency of the delivery of public services and reduce the administrative burden for citizens. The measure consists in redesigning a series of public services (and the underlying IT systems) in order to enable their automatic and proactive delivery on the basis of life or business events experienced by citizens (such as a marriage, the birth of a child or the creation of an enterprise). It shall notably allow a better integration of IT systems across different public authorities and contribute to the implementation of the once-only principle. The implementation of the measure shall be completed by 31 December 2025. 3.3.Reform: Development of event services and digital gateway for entrepreneurs The objectives of the measure are to improve the efficiency and the quality of the delivery of public services and reduce the administrative burden for entrepreneurs. The measure consists in establishing one digital gateway for the delivery of public services to entrepreneurs and redesigning a series of services (and the underlying IT systems) in order to interface them with the gateway, supporting the user-friendliness of services, the implementation of the once-only principle and, whenever possible, enabling the proactive delivery of information based on events experienced by businesses. It shall take into account the solutions developed in the context of the implementation of Regulation (EU) 2018/1724 establishing a single digital gateway to provide information, procedures, assistance and problem solving services. The implementation of the measure shall be completed by 31 December 2025. 3.4.Investment: #Bürokratt programme (national virtual assistant platform and ecosystem) The objective of the measure is to improve the user-friendliness and accessibility of public services in Estonia. The measure consists in developing a speech- and text-based AI virtual assistant for the access to online public services. The work shall build on pilot projects already carried out in 2020 and 2021. The implementation of the measure shall be completed by 31 December 2025. 3.5.Investment: Reconfiguration of basic digital services and safe transition to cloud infrastructure The objective of the measure is to increase the resilience, the security and the reliability of the IT systems and services of the Estonian public authorities through their migration to a private cloud and through comprehensive security testing. The measure consists of the following elements: -the creation of a new public body in charge of the central management of the IT basic services and infrastructures of public institutions,

-The establishment of new security testing capability within the Estonian Information System Authority (RIA), -the procurement of private cloud infrastructure resources, -the migration of existing information systems to the private cloud, -the comprehensive testing of the security of new cloud-based information systems used by public authorities, as well as of existing information systems, -the development of the capacity of the data embassy (i.e. IT hosting capacities established abroad to ensure the continuity of the availability of critical databases in case of disaster), building on the pilot project carried out between 2017 and 2020 in Luxembourg, -the extension of the private cloud to the data embassy, so that systems migrated to the cloud may also be hosted in and operated from the data embassy, -the migration of critical systems to the data embassy infrastructure. The implementation of the measure shall be completed by 31 December 2024. 3.6.Reform: Establishing the strategic analysis of money laundering and terrorist financing in Estonia The objective of the reform is to strengthen the capacity of the Financial Intelligence Unit to identify money laundering schemes and channels at an early stage. The measure consists in establishing a Centre for Strategic Analysis within the Financial Intelligence Unit. This Centre for Strategic Analysis is expected to allow more operational and more efficient prevention and detection of money laundering and terrorist financing. The team of the Centre for Strategic Analysis shall notably be in charge of developing specifications for a new IT tool drawing on data available from different sources. The Centre for Strategic Analysis might also identify necessary legislative changes. The implementation of the measure shall be completed by 31 December 2024. 3.7.Investment: Information system for real-time strategic analysis of money laundering and terrorist financing Building on the analysis carried out as part of the implementation of the reform 3.6, the investment aims at providing the Financial Intelligence Unit with a new dedicated IT system enabling the exploitation of data available from different authorities and the identification of possible money laundering schemes and channels in real time. The measure consists in developing the new IT system. The implementation of the measure shall be completed by 30 June 2026. 3.8.Investment: Construction of very high capacity broadband networks The objective of the investment is to improve the access to very high capacity broadband networks (VHCN), which offer a connection of at least 100 Mbps, for households and socio-economically important institutions such as hospitals, schools, public services and businesses.

The measure consists in providing financial support to the deployment of very high capacity broadband networks in areas of market failure (in accordance with provisions of Article 52 of the Commission Regulation 651/2014). The eligibility and selection criteria used to allocate the funding shall ensure an appropriate regional balance. The implementation of the measure shall be completed by 31 December 2025. C.2. Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support Sequential Number Related Measure (Reform or Investment) Milestone / Target Name Qualitative indicators

(for milestones) Quantitative indicators

(for targets) Indicative timeline for completion Description of each milestone and target Unit of measure Baseline Goal Quarter Year 44 3.1 Creation and development of a centre of excellence for data governance and open data Milestone Setting up a data management team in the Statistical Office, the Ministry of Economic Affairs and Communications and the State Information System Authority Establishment of the necessary organisational structure for coordinating data management Q4 2021 Creation of a Data Management Team in Statistics Estonia through the recruitment of expert staff tasked with coordinating the data governance framework and supporting other public authorities. In addition, posts shall be created at the Ministry of Economic Affairs and Communications and at the State Information System Agency to carry out development projects. By the end of 2021, at least five people shall be recruited across the three entities. 45 3.1 Creation and development of a centre of excellence for data governance and open data Target Completion of data quality improvement projects Number of projects 0 430 Q2 2025 Number of completed projects contributing to ensuring an improved reusability of data from public institutions, with up-to-date and accurate descriptions of databases and datasets. 46 3.1 Creation and developmen