Estonia weighs state aid for nuclear plant funding
Tuesday 10th November 2026 on 14:45 in
Estonia
Estonia is likely to need a combination of state support measures to finance a nuclear power plant, rather than a standalone loan guarantee, Climate Ministry Deputy Secretary General Jaanus Uiga told ERR.
The government has dropped plans to develop a separate guarantee scheme for the project, although Uiga said such a measure has not been ruled out. A study by Erkki Raasuke and Anne Sulling found that state guarantees alone would not be enough to attract large investments to Estonia.
“We have moved on from focusing only on a guarantee scheme, because it has become clear that this alone is not enough for projects of this kind,” Uiga said. Projects costing more than one billion euros would probably require a tailored solution, he added.
Fermi Energia chief executive Kalev Kallemets said that, under European Union rules, the only price-guarantee mechanism available for a nuclear plant is a two-way contract for difference. Under such an agreement, the state would cover the gap if the market price of electricity fell below the agreed price. If the market price rose above it, the producer would return the difference to the state, or Elering.
Kallemets said it was too early to estimate the agreed price. He put this year’s electricity price at around 90 euros per megawatt-hour by year-end, and said a small reactor’s approximate production cost could be around the same level, depending significantly on capital costs and interest rates.
Uiga said the financing would probably require a combination of measures, potentially including loans, loan guarantees, a contract for difference or equity. Whether such a package would be affordable for Estonia, and on what terms, remains to be assessed. Kallemets said the next government would probably work out the specific terms of a price-support mechanism.
ERR reported in the spring that the government had planned a guarantee scheme to support investments worth billions of euros, including offshore wind farms, energy storage and a nuclear plant.