As part of a pilot project led by the Ministry of Regional Affairs and Agriculture, regional development agreements have been signed in two areas: in Central Estonia, where Järva, Viljandi, Rapla and Lääne-Viru counties have joined forces, and in Southern Estonia, where the agreement includes Tartu, Jõgeva, Põlva, Valga and Võru counties.

According to Rainer Eidmiller, an adviser at the ministry's regional policy department, the aim is to launch a new form of cooperation that supports life beyond just Tallinn and Tartu. The initiative is not meant to solve every major issue, but rather to focus specifically on improving the business environment, Eidmiller emphasized.

He acknowledged that the agreements are somewhat general for now, but more concrete action plans will follow.

"Eight main areas of focus have been identified. These will soon have action plans, responsible parties, deadlines and everything else needed. But this development agreement is just the first step — a way for, say, three or four counties in one region to agree on what should be developed in the interest of them all," Eidmiller explained.

Participation in these agreements has been voluntary. Erkki Ehand, a member of the Central Estonia development agreement council and a business owner, said it's valuable for stakeholders to come together, assess each county's strengths and make concrete decisions.

"The development agreement for Central Estonia is based on the regional business landscape and reflects deliberate decisions — recognizing which counties are best suited for certain activities and which are not. It's about setting clear priorities," Ehand said.

He pointed to Lääne-Viru County as an example, noting its access to the sea. "If we recognize our access to the sea, the next step could be a fast industrial corridor that also connects businesses in Järva, Rapla and Lääne-Viru counties. A fast route to the port, with logistics hubs along the way," he said.

Ehand also mentioned other opportunities: "The Tapa military campus, for instance, could enable defense industry development for businesses in Järva and Rapla counties. Or take the existing dairy industry, giving Lääne-Viru entrepreneurs a lot of opportunities to add value to those products."

In his view, counties are currently fragmented and businesses gain little from piecemeal infrastructure upgrades and fragmented funding. "We need to make very specific decisions and invest where the return will be the greatest," Ehand stressed.

In Southeast Estonia, stakeholders are hoping for the launch of a major investment program similar to the Just Transition Fund initiative in Ida-Viru County, which has helped that region attract investments and accelerate development, said Tiit Toots, head of the Võru County Development Center.

"What's needed is a major investment program that supports entrepreneurship — something that would boost both local companies' investment capacity and bring in new investors from outside the region," Toots said.

For Toots, a key aspect of the agreement process was that the counties sat down at the same table and laid out both the challenges and potential solutions.

"When we put our heads together and jointly identify the bottlenecks and development needs and then clearly present them, we're stronger for it. It added value that government representatives also took part in the discussion," he suggested.

Eidmiller said he hopes the pilot project will eventually lead to a legal framework and dedicated funding, making state involvement crucial.

"We're now seeking approval from the national government to continue the project and secure concrete funding. Without a legal basis, it's very difficult to move forward. Council members believe we need legislation to define regions, regional councils and development agreements. After that, we'll need funding and support measures," Eidmiller said.

The parties involved in the regional cooperation agreements hope the government will make a decision by the end of the year. According to Eidmiller, they are prepared to keep pushing forward even if the answer is no.

"We need to come up with something to support more balanced regional development. It doesn't necessarily have to be these development agreements, but there must be something to better direct funding outside Tallinn and Tartu — to develop other regions. If development agreements don't work out, we'll need to come up with another model," he said.

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