"When we entered the negotiations, our goal was to gain as much information and expertise as possible to strengthen our own defense capability. So although the agreement is called a drone deal, in substance it is an agreement to boost defense capability and defense‑industry cooperation," Defense Minister Hanno Pevkur said of the accord signed on July 7 in Ankara on the sidelines of the NATO summit.

"The agreement confirms Ukraine's readiness to export its products to us and Estonia's readiness to procure various capabilities from Ukraine in the future or produce them jointly, if they meet the needs of our Defense Forces. It aligns with Estonia's interests and covers precisely the areas our Defense Forces and defense industry are most interested in," said Regina Palandi‑Paju, deputy director for security and defense coordination at the Government Office.

"The drone agreement concerns joint production between Estonia and Ukraine — meaning primarily the production of Ukrainian technology in Estonia and Estonia's procurement of Ukrainian defense‑industry products, not the shipment of Estonian products to Ukraine. The latter is handled separately under Estonia's Ukraine assistance measure (0.25 percent of GDP), where we support Ukraine with Estonian defense‑industry goods," she said.

According to her, the agreement allows Estonia and Ukraine to deepen knowledge‑sharing not only on drones but also in IT, cybersecurity, military technology and industrial development.

Ukraine's presidential administration echoed this in its press release, saying the drone agreement provides for defense‑industry development, deeper technological cooperation, and exchange of experience and intelligence. "Ukraine and Estonia will develop joint military production and establish new production units in both countries," the statement said.

"The cooperation includes, among other things: developing and producing air‑defense capabilities, drone production, sensor and early‑warning systems, ammunition production, battlefield command‑and‑control systems, and maritime defense capabilities," Ukraine's statement listed.

Pevkur: Primary users of manufactured products would be Ukrainians

Pevkur emphasized that the agreement gives Estonia's defense industry the opportunity to begin production in Estonia together with Ukrainian defense‑industry companies — and that Ukrainian firms will now receive permission from Ukraine's Ministry of Defense to move production abroad, something they were not allowed to do before the agreement.

One Ukrainian defense‑industry company has already expressed interest in producing ammunition in Estonia, and more than 10 Ukrainian companies are at the stage where they could begin moving production here immediately, Pevkur said.

Palandi‑Paju noted that a joint steering group will be created to implement specific technologies and joint projects. Operating under the "Build with Ukraine" framework, it will select and process potential joint‑production initiatives.

"Implementation begins immediately, and President Volodymyr Zelenskyy confirmed this to our prime minister Kristen Michal at the signing in Ankara," she said.

Asked who will use the products manufactured in Estonia, Pevkur replied: "Primarily Ukrainians, of course, because they need it the most."

Estonia's agreement is broader than those of Latvia and Lithuania

Pevkur stressed that the agreement also gives Estonia the right to purchase the Ukrainian defense‑industry products it most needs to strengthen its own defense capability. "Whether it's long‑range fire, drones or information systems — we gain the right to buy the best possible defense technology from Ukraine. The Ukrainian Ministry of Defense, and above all President Zelenskyy, authorized this with his signature."

"We are clearly interested in Ukraine's battlefield information systems — for example, Delta, which has been mentioned in the media. But they have many other systems that are of great interest to us," Pevkur said.

Estonia's right to procure Ukrainian weaponry and the permission to bring Ukrainian defense‑industry factories to Estonia are the two aspects that distinguish Estonia's agreement from the so‑called drone agreements previously signed by Latvia and Lithuania, Pevkur noted.

"Our aim was to expand cooperation beyond drone production to the entire defense industry," he said. "So compared with the Ukraine–Lithuania and Ukraine–Latvia agreements, ours is significantly broader and offers far more opportunities for Estonia's defense industry to grow."

Asked about the financial scale of the agreement, Palandi‑Paju stressed that it does not impose financial obligations on the Estonian state.

"Primarily, the agreement enables cooperation and joint production between the two countries and their defense industries. Procuring Ukrainian technology made available through the agreement will depend on the needs and priorities of Estonia's Defense Forces. If Ukraine's defense industry offers the most competitive solution that meets our needs, we will proceed with procurement. But that process is still ahead, so it is too early to discuss costs," she said.

Estonian defense manufacturers welcome the agreement

The agreement was welcomed by Rene Ehasalu, cluster manager of the Estonian Defense and Space Industry Association.

"For us, the drone cooperation agreement between Estonia and Ukraine is definitely a positive development. It is an important step that creates much better conditions for cooperation between the two countries' defense industries," he said.

He noted that previously, Estonian companies wanting to cooperate with Ukrainian firms were hindered by the lack of export licenses. The new agreement creates a clearer framework for processing such licenses.

"In essence, the agreement gives Estonian industry the opportunity to create joint production in Estonia with Ukrainian companies — bringing battle‑tested Ukrainian defense technologies here and starting joint production. This strengthens Estonia's own defense‑industry capability by bringing in new knowledge and technologies, and in the long term boosts our export potential," Ehasalu said.

He added that the association has 241 members working in diverse fields — from metalwork and cybersecurity to unmanned systems and space technologies. "The range of what our industry can offer is very wide. Considering how technologies have evolved in Ukraine, there is clear potential in unmanned systems, drone detection, counter‑drone systems and other capabilities that are highly relevant on today's battlefield."

Ehasalu said Estonian companies also have much to offer Ukraine, as Estonia's defense industry is highly developed. "Our strengths include flexibility, growing production capacity, engineering expertise and the references we've built over the years — including from Ukraine. Many of our companies supported Ukrainians both before and during the war. We have the knowledge, and doing this together in a formal cooperation framework will amplify the positive impact."

He added that cooperation with Ukraine will bring new expertise to Estonia's defense industry and increase export potential.

The association's companies currently have a combined turnover of about €750 million, of which €450 million comes from exports. By the end of the decade, the association aims to grow the sector's turnover to €2 billion, requiring annual growth of about 25–30 percent.

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