Estonia’s plan to reserve apartment grants for factory renovation faces opposition

Estonia plans to direct 160 million euros in apartment-building renovation grants over 2027 and 2028 exclusively to factory-based reconstruction, a proposal opposed by two industry groups, ERR reports. Conventional renovation would not receive state support under the scheme.

The Association of Technical Consultants (TKL) says the plan could leave many apartment associations without needed funding, stall the conventional construction market and result in a significant share of the grant money going unused. It also warned that concentrating support on one construction method could reduce orders for conventional contractors and weaken competition.

Factory-based reconstruction involves producing insulated exterior wall panels, sometimes including roof elements, in a factory. The panels can include windows, ventilation ducts and finished facades, and are then transported to the building and installed. Most of the facade work is done at the factory, leaving assembly to be carried out on site.

Infrastructure Minister Kuldar Leis told ERR that the government favours the method partly because it can make renovations faster and improve quality. Much of the work takes place in controlled factory conditions, he said, reducing construction time and disruption for residents. Leis also noted that many Estonian apartment buildings were built to the same design and that local companies export factory-based renovation solutions.

TKL says only a handful of companies in Estonia have experience producing facade elements for this type of renovation. The association’s survey suggests interest could be very limited if the grant for factory-based work is set at 20 percent. It recommends raising that rate to 30 percent and offering at least 20 percent for conventional and phased renovations.

The Union of Apartment Associations has also urged the government and the Climate Ministry to let associations choose the renovation method that suits their building, location and finances. It recommends a 35 percent grant for factory-based renovation and extending the 20 percent grant to buildings renovated conventionally.

The Climate Ministry does not plan to change the scheme. Leis said the state does not want its contribution to exceed 20 percent because the funding comes from the state budget and should return to it in full through tax revenue. The current European Union funding-period grants have been allocated, and new funding is not expected for several years, he said.

Estonia needs to renovate 14,000 apartment buildings over the next 20 years, one reason the government is promoting what it considers a faster method.