The Estonian Ministry of Economic Affairs and Communications in cooperation with the Kredex foundation and Enterprise Estonia have developed a €25 million euro aid package for supporting the tourism sector.
Under the support package tourism enterprises will be provided loans guaranteed on favorable conditions by Kredex and micro, small and medium-sized tourism enterprises will be able to apply for direct support from Enterprise Estonia.
“The tourism sector has been among those to suffer the hardest blow from the start of this crisis, and some businesses’ revenue has declined to zero. Thus, support from the state is crucial for helping our tourism entrepreneurs cope until the situation normalizes,” said Minister of Foreign Trade and IT Kaimar Karu.
The Ministry of Economic Affairs and Communications will start providing favorable loan products to large tourism enterprises. Extraordinary guarantees for new loans under more favorable conditions will be made available for accommodation and catering businesses as well as travel agencies and operators.
The aim of providing guarantees is for businesses to be able to take out new business and investment loans to overcome temporary difficulties caused by the COVID-19 outbreak.
The ministry will also make available direct support through Enterprise Estonia to micro, small and medium-sized tourism enterprises in the total sum of €25 million. Support per business will range from €2,000 to €60,000, depending on the company’s area of operation, size, loss in revenue and needs for surviving the crisis.
In order to support tourism enterprises operating on Estonia’s quarantined islands, the €25 million package contains €1 million earmarked specially for tourism companies on Saaremaa, Hiiumaa, Virmsi, Ruhnu, Kihnu, Muhu and Manija islands. Another €1 million will be allocated to tourism companies in Ida-Viru County.
Karu said that while the measures to be provided through Kredex and Enterprise Estonia have been fully developed, the implementation thereof requires approval from the European Commission and the Estonian government.
“We understand entrepreneurs’ justified wishes to quickly receive their support, but first, a permission for state aid is required from the European Commission, an application for which will be sent in for assessment by Enterprise Estonia and Kredex through the Ministry of Finance this week. After that, the government will determine the orientations and sizes of support,” Karu said.
Criteria and public conditions for applying for aid will be announced by Kredex and Enterprise Estonia once the support package has been approved by the government.
Depending on their profile, tourism enterprises are also able to apply for support through other Enterprise Estonia measures as well as through those of the Rural Development Foundation and the Unemployment Insurance Fund.