The Estonian defense industry was on the agenda at Monday's National Defense Council meeting. According to President Alar Karis, the tense situation in the world at the moment requires Europe to increase its defense production. Currently, more than half of Europe's defense equipment comes from outside the EU.

"We are also part of Europe, so we need to work harder to ensure that resources remain here and that there are more companies like the one from the South Korean defense industry, which is currently planning to invest €100 million here. In other words, if we give (Europe) money, it would be good if they also invested here," said President Karis.

Many details are still to be clarified. However, according to Minister of Defense Hanno Pevkur (Reform), all the investments by South Korean company Hanwha Aerospace are in one way or another related to the needs of the Estonian Defense Forces (EDF) or agreements made with local defense industry companies.

The package also includes the establishment of a maintenance and repair center and an ammunition factory. As things stand, the plans are for the factory to produce 40 mm ammunition.

"When we talk about 40 mm ammunition, it is still intended for combat vehicles. Combat vehicles generally use 25, 35, or 40 mm ammunition, and that is what Hanwha also uses for its vehicles – the Redbacks – so that is the main focus. But of course, if the production line already exists, then it is also possible to produce other calibers on that line," said Pevkur.

The exact production volumes and completion date of the factory have not yet been confirmed. A suitable location for its construction also has to be found, with various options under consideration.

"It depends on what capacities we are talking about and how large the safety zones need to be. If it is possible to accommodate them in Pärnu County and they want to go to Pärnu County, then that is possible," said Pevkur.

"There are two plots of land available in Pärnu County, but if larger safety zones are needed, then entirely new areas will have to be considered, because as far as the three areas in Lääne County and the two areas in Ida-Viru County are concerned, there are already other interested parties," the defense minister explained.

The fate of the large-caliber ammunition factory planned for Ida-Viru County may also be decided this week. The investment in that facility would amount to as much as €300 million, with Estonian currently awaiting a response to its offer from an international company.

More international defense companies could be brought to Estonia, however the president also pointed out that there are some key issues holding them back.

"One problem that arises with these defense industry parks, is that we may not currently have enough electrical energy to attract companies that need more of it," Karis said.

There are other concerns as well.

Prime Minister Kristen Michal (Reform) has pointed out, for example, that slow processes hinder the establishment of defense industry parks and polygons. At the same time, the turnover of the Estonian defense industry reached €730 million last year, most of which came from exports.

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