Last week, the Ministry of Climate presented an overview of Rail Baltica's construction progress in Estonia — both what has been completed so far and what lies ahead — to the Riigikogu Economic Affairs Committee. The major multinational railroad project aims to connect the Baltics to the European rail network.

According to the presentation, the project's official completion date remains unchanged at 2030, confirmed by Deputy Secretary General Sander Salmu. By that time, the railway is expected to be operational from Tallinn to the Lithuania–Poland border, though with several construction-related compromises.

These compromises are significant. For example, the entire Estonian section will be built as a single-track line, although the original plan called for a double track. To allow for two-way traffic and enable faster trains to overtake slower ones, sidings will be built at stations, stops and so-called operational points.

The Muuga–Soodevahe section, which will serve freight traffic only, will also be constructed as a single-track line.

Traffic control systems will be built out to 80 percent and electrification to 70 percent of the originally planned capacity, as the single-track design reduces the need for full-scale implementation in the initial phase.

Additionally, 11 to 13 viaducts will not be constructed in the first phase. Detours will be routed through other planned nearby crossings. All 12 local stops will be developed at a minimal level — meaning full station buildings will not be constructed and outdoor areas, such as parking lots and landscaping, will be scaled back.

The Ülemiste and Pärnu passenger terminals are still expected to be built to full specification by 2030, though the ministry noted that adjustments may be made if construction costs exceed current projections. Construction of the Ülemiste terminal building is set to begin this year.

Despite the scaled-back plans, the Ministry of Climate emphasized that the railway's throughput capacity and connection speed will remain on par with the full-scale solution.

Half of funding found

The estimated cost of the Rail Baltica construction project — covering only the first phase — is €3.1 billion, of which about €1.5 billion is currently funded. An additional €272 million is projected for "supporting activities and the launch of regional passenger services."

According to current estimates, the unfunded portion amounts to €1.756 billion.

In 2025, nearly €290 million is planned to be invested in construction. So far, around €1.1 billion worth of construction activities are covered by contracts. A significant share of the unfunded portion is expected to be financed through the next long-term budget of the European Union.

The Ministry of Climate's report notes that the implementation schedule for Rail Baltica's various phases depends on the level and timing of EU funding allocated to specific segments and structures through the Connecting Europe Facility (CEF), as well as Estonia's required co-financing.

This means that while the report outlines a general timeline for the work, the actual costs will remain uncertain until construction tenders are held.

"Since construction costs change over time, it's understandable that the total cost estimate must be updated as new data becomes available and the project progresses," the report states.

The timeline for building specific Rail Baltica components will depend on both CEF funding and the Estonian state's financial capacity, it adds. As a result, the timing of construction tenders and contract signings may shift compared to current plans.

Beyond construction, funding is also needed for new trains. According to the Ministry of Climate, between €60 million and €75 million should be allocated in the state budget strategy for 2026–2029. The matter is time-sensitive, as procuring new trains takes several years.

Rail Baltica's current funding forecast shows a shortfall of €160 million for next year and €255 million for the year after.

According to the Ministry of Climate's report, the plan is to cover these gaps using European Union funds and revenue from greenhouse gas emissions trading. Between 2028 and 2030, Estonia hopes to secure approximately €1.25 billion from EU sources, the forecast shows.

"If those funds prove insufficient, options including taking on debt to cover the shortfall will need to be considered," the report notes.

This year, Rail Baltic Estonia signed two alliance contracts that will secure construction of the railway's Estonian section. The combined value of these contracts is €726 million.

The railway's construction is primarily planned to be financed through the EU's Connecting Europe Facility (CEF), along with national co-financing. To date, €1.15 billion in EU funding has been earmarked for Estonia's portion of the Rail Baltica project.

As of April 2025, 144 people are working on the project in Estonia. That number is projected to increase to 215 by the end of 2030.

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