Investor presentation, Republic of Estonia

Republic of Estonia
Investor presentation
1 June 2020

Disclaimer (I/II)
1
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Disclaimer (II/II)
2
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Estonia or any of its officers or advisers as to the accuracy, reliability or completeness of the Information or as to the
reasonableness of any assumptions on which any of the same is based or the use of any of the same. Accordingly, no such
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any errors, omissions or misstatements made by any of them. The statements contained in this presentation are made as
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to update or correct any inaccuracy contained herein or be otherwise liable to you or any other person in respect of any
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This presentation may contain statements, statistics and projections that include words such as "intends", "expects",
"anticipates", "estimates" and words of similar import. All statements included in this presentation other than statements
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assurance that such forecasted or budgeted numbers will be achieved. If such figures are not achieved, this may have a
negative impact on the performance of the economy of Estonia. By their nature, such statements involve risk and
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PROSPECTUS OR OFFERING CIRCULAR FOR ANY SECURITIES.

Table of contents
3
I
II
III
IV
V
VI
VII
VIII
Introduction p. 2
Economic Developments p. 8
Banking Sector p. 20
Fiscal Discipline p. 24
Educated and Competitive Estonia p. 30
COVID-19 Response p. 34
Debt Management p. 38
Contemplated Transaction p. 41

Republic of Estonia in a nutshell
5
Estonia
Estoni
a
Tartu
Tallinn Narva
Pärnu
Republic of Estonia
Population (1)
1,328,976
Territory 45,227 km2
Capital Tallinn
Currency Euro
Nominal GDP (2)
EUR 28,037 million
GDP per capita (2)
EUR 21,163
GDP growth in 2019 (2)
4.3%
Unemployment rate 2019 (2)
4.4%
Credit ratings
S&P: AA- positive
Moody's: A1(u) stable
Fitch: AA-(u) stable
Largest export destinations (2)
Finland: 16.30%
Sweden 10.50%
Latvia: 9.09%
USA: 6.78%
Germany: 6.30%
Euro area membership 1 January 2011
OECD membership 9 December 2010
EU membership 1 May 2004
NATO membership 29 March 2004
UN membership 17 September 1991
Independence restored 20 August 1991
Declaration of independence 24 February 1918
(1) Statistics Estonia, as of 1.1.2020
(2) Statistics Estonia, 2019 full year
Small, fast-growing and dynamic Northern European country
1991 1999 2004 2010 2011 2017 2019
Regains
Independence
EU
membership
Joins the
WTO
UN membership
In 1993 first local bond issued, 300m Estonian
kroons (EUR 19.2m)
In 2002 first Eurobond issued, EUR 100m
Joins NATO Joins EMU, and
adopts Euro currency
OECD
membership
EU presidency
Latest parliamentary
elections
2020
Non-permanent
member of UN
Security Council

Estonia’s credit rating on a positive track
6
Estonia is firmly in the AA category of European countries with low debt-to-GDP ratio
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
S & P Fitch Moody's
A1
AA-
Estonia became a
member of the EU
Estonia joined the
euro area
AA-
AAA/Aaa
AA+/Aa1
AA/Aa2
AA-/Aa3
A+/A1
A/A2
A-/A3
BBB+/Baa1
BBB/Baa2
BBB-/Baa3
Estonia’s credit rating development
Credit rating comparison
Source: Standard & Poor’s, Fitch Ratings, Moody’s, all as of 15 May 2020
Development of general government gross debt as % of GDP
• Estonia has been able to improve its credit
rating firmly into the AA category over the
years, and the trajectory is still upwards
• As the latest development, S&P assigned a
positive outlook to Estonia’s AA- rating at
the end of February 2020
• Estonia credit rating is approaching (and
sometimes above) that of its western
European peers
• General government debt has remained
extremely low even in times of economic
distress during the financial crisis and the
euro crisis
Country S & P Outlook Moody's Outlook Fitch Outlook
Estonia AA- positive A1 stable AA- stable
Austria AA+ stable Aa1 stable AA+ positive
Finland AA+ stable Aa1 stable AA+ stable
France AA stable Aa2 stable AA negative
Belgium AA stable Aa3 stable AA- negative
Ireland AA- stable A2 stable A+ stable
Lithuania A+ stable A3 positive A stable
Latvia A+ stable A3 stable A- negative
0%
20%
40%
60%
80%
100%
120%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Estonia Ireland Finland Germany
Austria Euro area France Belgium
Source: EurostatSource: Standard & Poor’s, Fitch Ratings, Moody’s, as of 15 May 2020

Key credit highlights of Estonia
7
Strong growth and
dynamic economy
• Estonia has a robustly growing economy with annual GDP growth averaging 4.9% from 2017 to 2019(1)
• With a flexible, dynamic and diversified economy, Estonia has a history of recovering swiftly from economic downturns
Strong external
performance
• Estonia is a small open economy, and the export sector represented 72.6% of GDP in 2019(1)
• The export base has expanded significantly with growth driven by high value-added Information, Communications and Technology and
professional services sectors and the country has competitive and large electronics manufacturing sector
Fiscal prudence
• Estonia has the lowest general government debt level of any EU country at 8.4% of GDP in 2019(1)
• Fiscal prudence has been tight over the economic cycles, and the government does not seek to diverge from the established track record
• Taxes are low, providing competitiveness and a buffer for fiscal balancing, and tax structure is growth-boosting with low deadweight losses
Sustainable economic
policies
• Estonia’s economic policies have supported future growth and competitiveness by investing in education and research and development
• Estonia’s investments in education have resulted in the best scores of any western country in latest PISA student assessments – evidence that
the country is nurturing a future generation of experts and increased competitiveness
Strong institutions
and governance
• Stable and strong institutional and governance landscape characterise Estonia with continuity in key policies and high ranking in Worldwide
Governance Indicators
• Estonia is a free society with open debate of policy issues, freedom of information and low corruption
Dynamic labour
market
• Unemployment rate in Estonia was only 4.4% in 2019(1)
and the country has the second-highest employment rate in the EU at 68.7% in 2019(1)
• Competitiveness has remained strong despite substantial wage increases due to robust productivity growth, and Estonia has a proven track
record of being able to adjust wages in an economic downturn
Stability from
international
cooperation
• International cooperation is the base for sustained stability for Estonia, with the country having joined both the EU and NATO in 2004
• Estonia joined the EMU and eurozone in 2011, and has benefited from the ECB’s proven track record of clear policy goals, monetary policy
independence and a wide arsenal of monetary policy tools at its disposal
Stability of the
banking sector
• Estonian banks have on average the highest CET1 ratios in the EU(2)
, and one of the lowest NPL ratios in the EU at 0.4% at the end of Q1 2020(3)
• Deposits have grown by nearly twice as much as private sector credit, and banks have expanded their funding mix by starting to issue bonds
• The banking sector is dominated by Nordic-owned banks, whose parent companies have historically supported their subsidiaries, but also the
local banking sector is growing
Timely COVID-19
response
• Estonia was quick to react to the COVID-19 pandemic, declaring emergency on 12 March 2020 and implementing various restrictions
• EUR 2.8 billion Supplementary Budget (10.8% of GDP) has been approved to support businesses, individuals and the healthcare sector
• COVID-19 will lead to a substantial government budget deficit, and Estonia expects its total funding requirement for 2020 to be EUR 3.78 billion,
with additional EUR 1.2 billion needed in 2021(4)
Estonia‘s strengths range from its dynamic economy to its strong institutions
Source: (1) Eurostat; (2) ECB; (3) Bank of Estonia; (4) Ministry of Finance

Estonian Centre
Party, 25 seats
Conservative People's Party
of Estonia, 19 seats
Isamaa
("Fatherland"),
12 seats
Estonian Reform
Party, 34 seats
Social Democratic
Party, 10 seats
Unaffiliated MPs, 1
seat
Government
56 seats
Opposition
45 seats
0 101
Estonia has a stable government
8
Estonia is renowned for good governance and effective political system
Current Estonian Parliament composition – strong government
8.3 10.0
16.7 16.7 16.7
20.0 20.0 21.4 21.4
25.0 25.0 25.0
28.6 30.0 31.3 31.4
40.0 40.0 40.0 41.7 41.7 41.7 41.7 41.7 42.9
50.0 50.0
58.3
0
10
20
30
40
50
60
SVK ISL AUS BEL PRT EU FIN ITA GBR ESP CHE SVN LUX HUN NLD OECD CZE DNK NOR AUT DEU IRL POL SWE LVA FRA GRC EST
2017-2018ResponsivenessRate
Indicator
Estonia is an agile country in making reforms – top performer as measured by OECD’s reform responsiveness rate indicator
• Governance in Estonia is renowned for its efficiency
• OECD assigned Estonia the highest score in its
reform responsiveness rate indicator in its 2019
study
• Estonia has a strong majority government made of a
centre-right coalition
• The latest parliamentary election was conducted in March
2019 and the parliament has a 4-year term
• Record number of women were elected to the
parliament in the election, and Estonia has a female
president
• The state budget strategy for the years 2020-2023 has
five priorities: 1) family-friendly Estonia; 2) cohesive
society; 3) knowledge-based economy; 4) efficient
governance; 5) free and protected state
Source: Economic Policy Reforms 2019: Going for Growth, OECD
Source: Riigikogu

Key policy measures
9
The basic principles of the Government coalition are forward-looking
Government’s five priorities Main measures to achieve the targets
 Investments to the digitalisation of the economy and increases in state R&D financing. IT, robotics
and programming expanded in the national curriculum. Lifelong learning for adults.Knowledge-based economy
Higher productivity and
employment  Investments into infrastructure – roads, railways, incl. Rail Baltic. Development of public transport
and importance of having a high-quality international air connection with Estonia.
 Efficiency of current family policy measures will be increased, support for multi-child and young
families. Measures to support the housing stock investments of local governments.Family-friendly Estonia
Lower poverty of children  Reform of the second pillar of pension system, which will allow people to opt out of the second
pillar pension scheme if they so wish.
 Extraordinary pension increase according to the possibilities of the state budget. More child welfare
workers and investments to detect children’s problems, including mental health.Cohesive society
Lower absolute and relative
poverty  Investments in research and development – the goal is to increase private sector R&D expenditure
to 2% and public sector R&D expenditure to at least 1% of GDP.
 In order to stimulate both domestic and foreign trade, the excise duty on alcohol will be reduced by
25% and the increase in tobacco excise duty will be lower than previously agreed.
Efficient governance
Expenditure and employment of
the general government will not
increase
 Steps to reduce bureaucracy and administrative burden. Further development of e-state, enabling
electronic communication with the state in all fields.
 A broad-based audit of the state budget will be carried out, in the course of which all sources of
state revenue and expenditure will be reviewed and their purposefulness will be assessed.Free and protected state
Defence expenditure at least
2% of GDP  Cybersecurity capabilities will be strengthened. Independent and consistent foreign and security
policy implemented, mainly through involvement in the European Union and NATO.

-2%
0%
2%
4%
6%
8%
2011 2012 2013 2014 2015 2016 2017 2018 2019
Estonia Euro area
Belgium France
Latvia Finland
Private consumption
expenditure
47%
Gross fixed capital
formation and valuables
26%
General
government final
consumption
expenditure
20%
Net exports
4%
Change in
inventories
2%
Final consumption expenditure
of non-profit institutions serving
households
1%
Estonia – the growth story
11
Estonia’s economy has grown strongly for many years, outpacing peers
Source: Eurostat
Real GDP Growth
Source: Statistics Estonia
GDP by expenditure, 2019
• Robust domestic demand and strong exports have been key drivers for the strong GDP growth of around 5% in real terms
from 2017 to 2019
• Estonia has been one of the fastest growing economies in the EU during the 2010s as it rebounded quickly from the financial
crisis and avoided the stagnation many EU countries suffered from
• Supported by strong institutions and with increased focus on high value-added sectors like ICT, Estonia’s relatively small
and dynamic economy has a solid basis for future growth
• With a diverse sectoral split, GDP growth is not overly dependent on the contribution of just one sector

Estonia’s GDP – sectoral split
12
Service sectors playing an ever larger role whereas construction has slowed down
Composition of gross value added by sector, 2019
Source: Statistics EstoniaSource: Statistics Estonia
Annual growth in selected sectors of the economy
-5%
0%
5%
10%
15%
20%
25%
30%
2012 2013 2014 2015 2016 2017 2018 2019
Manufacturing
Wholesale and retail trade; repair of motor vehicles and motorcycles
Information and communication
Real estate activities
Professional, scientific and technical activities
Manufacturing
14%
Wholesale and retail trade;
repair of motor vehicles and
motorcycles
11%
Real estate
activities
10%
Information and
communication
7%
Transportation
and storage
7%
Construction
7%
Public administration and
defence; compulsory social
security
7%
Professional, scientific and
technical activities
6%
Education
5%
Financial and
insurance activities
4%
Human health and
social work activities
4%
Others
18%
-2
-1
0
1
2
3
4
5
6
7
2012 2013 2014 2015 2016 2017 2018 2019
ContributiontoVAgrowth,
percentagepoints
Agri Energy, mining Manufacturing Construcion
Trade Transportation ICT Finance
Prof.services Other
Contribution of different sectors to value added growth
Agriculture
Trade
Construction
FinanceICT
ManufacturingEnergy, mining
Transportation
OtherProf. services

Strong and dynamic labour market
13
Both low unemployment and high employment ratio drive the dynamic labour market
4.4 4.5
5.0
5.4
6.3
6.7 6.8
7.5
8.5
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
Unemploymentrate,%ofactive15-74-
yearpopulation,2019
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
2013 2014 2015 2016 2017 2018 2019
Long-termunemployment,shareof
totalunemployment
Estonia Euro area Belgium
France Latvia Finland
-4%
0%
4%
8%
12%
16%
-1%
0%
1%
2%
3%
4%
2016 2017 2018 2019
Realproductivitygrowth,%change
onpreviousyear
Estonia wage growth (rhs) Estonia Euro area
Belgium Germany France
Finland
68.8 68.7 68.3
66.0
65.3 65.0
63.7
62.4
60.6
59.7
57.0 56.5
54%
56%
58%
60%
62%
64%
66%
68%
70%
Employmentrateof15-74year-old
people,2019
Second highest employment rate in the EUSubstantial reduction in long-term unemployment
Source: Eurostat
Source: Eurostat
Source: Eurostat
Source: Eurostat
Very low unemployment rate Fast real productivity growth despite rising wages

0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Workingpermitsgrantedtopersonsfrom
outsideEU
Short-term working permits (up to 1 year)
Temporary residence permit for working
(up to 5 years)
0% 10% 20% 30% 40%
0-14 years
15-24 years
25-49 years
50-64 years
65-79 years
80 years +
Estonia
Finland
Euro area
Migration has increased the workforce size
14
Estonia has experienced positive migration in recent years
Population by age groups 2019 - large working age populationIncrease in short-term foreign labour
Source: EurostatSource: Ministry of the Interior
Estonia has a positive net migration inflow
• At the end of 2019, Estonia’s economy had an unemployment
rate of only 4.4% and the employment rate had increased to
68.7%, second highest in the EU(1)
• The labour market conditions are tight, which has also
provided grounds for wage increases but productivity growth
has been robust
• Net migration has turned significantly positive both due to
Estonians returning to their homeland and foreign workforce
being imported
• Estonia’s working age population is also proportionately
larger than in many comparable countries
Source: (1) Eurostat
-3,000
-2,000
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2015 2016 2017 2018 2019
Netmigration,persons
Estonian citizens EU citizens Russian citizens
Ukrainian citizens Others Net migration

Inflation at healthy levels
15
The fast-growing services sector and tight labour market are the main drivers of inflation
Source: Eurostat Source: Eurostat
Annual HICP* inflation rate in Estonia
Annual HICP by components in Estonia
Source: Eurostat
-2
0
2
4
6
8
10
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
% Food Goods Services
0
1
2
3
4
5
6
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
%
HICP HICP excl. energy, food, alcohol and tobacco
0.0
0.5
1.0
1.5
2.0
2.5
3.0
% 2010-2018 avg 2019
HICP inflation rates in different countries
* The Harmonised Indices of Consumer Prices (HICP) measure the changes over time in the prices of consumer goods and services acquired by households.

-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
%ofGDP
Current account balance Goods Services
Primary income Secondary income
Balance of payments
16
Current account surplus shows that Estonia is a balanced and export-oriented economy
Current account balance peer group comparison, 2019
Source: Eurostat
Source: Eurostat
Development of current account balance as % of GDP
Exports development of high value-added sectors Net foreign direct investment inflow as % of GDP, 2019
0%
5%
10%
15%
20%
25%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
%ofservicesexports
ICT services Business services
-9.4
-2.9
-1.2 -0.8 -0.8 -0.7 -0.5 -0.4
2.2 2.6
3.9
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
%ofGDPin2019
Source: Bank of Estonia
3.4
1.5 1.3
0.5
-0.4
-1.4 -1.6 -1.9
-4.1
-5.5-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
NetFDIinflowas%ofGDPin2019

Active export sector and stable growth
17
Estonia is an export-driven economy - proven track record in recovering from shocks
Development of exports as % of GDP
62 61 58 57
61
66 63 63
66
61
74
86 86 84 81
77 78 76 74 73
0
10
20
30
40
50
60
70
80
90
100
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Exports of goods
and services, %
of GDP
-7
6.3
2.8
10.2
17.3
19.9
9.5
12.6
0.9
-20.3
24.2 24.2
4.8
2.8 2.6
-1.5
5.1 3.8 4.3 4.9
-30
-20
-10
0
10
20
30
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
% change YoY
Source: Eurostat
Export of goods and services
82.5
81.7
72.6
59.9
55.9
55.7
48
47.4
46.9
40
36.8
31.4
20% 30% 40% 50% 60% 70% 80% 90%
Netherlands
Belgium
Estonia
Latvia
Denmark
Austria
Euro area
Sweden
Germany
Finland
Norway
France
Exports of goods and services as % of GDP, 2019
• The volume of exports has grown at 4-5% annual rate over the
past 4 years. The growth can be attributed to the swift expansion
in the exports, especially in high value-added services exports
• Estonia also has a very good track record of recovering from
economic shocks such as the financial crisis or Russian sanctions
• Estonia has a high trade surplus and exports form a significant
part of the GDP
• The trade surplus arises from the high net export rate of
services whereas Estonia is a net importer of goods
• Downward trending share of exports in GDP is balanced by
increasing domestic demand due to increased domestic wealth
Export of goods and services, volume change YoY

28%
29%
30%
31%
32%
33%
34%
35%
0%
5%
10%
15%
20%
25%
30%
35%
2013 2014 2015 2016 2017 2018 2019
Shareofservicesexportsas%oftotalexports
%oftotalservicesexports
Transportation, storage Information & communication
Manufacturing Professional, scientific & technical
Construction Administrative & support services
Wholesale & retail trade Financial & insurance activities
Services exports (rhs)
[CELLRANGE]
[CELLRANGE]
[CELLRANGE]
[CELLRANGE][CELLRANGE][CELLRANGE][CELLRANGE]
[CELLRANGE]
[CELLRANGE][CELLRANGE]
[CELLRANGE][CELLRANGE][CELLRANGE][CELLRANGE][CELLRANGE][CELLRANGE][CELLRANGE]
[CELLRANGE]
0.0
0.5
1.0
1.5
2.0
2.5
EURbillions
Exports of goods of Estonian origin, 2019
Re-exports, 2019
Estonia’s exports – sectoral split
18
Diversified exports with strong growth in high value-adding sectors
Composition of export of goods by country Composition of export of goods by sector
1
2
3
4
EURbillions
Exports of goods of Estonian origin, 2019
Re-exports, 2019
• The share of services in total exports has grown steadily
and was almost 35% in 2019. Information and communication
services are driving the development
• Goods continue to form the bulk of the exports and there the
stable Nordic countries are the biggest market, with the
other important markets being principally EU countries
• Estonia has an advanced electronics manufacturing sector
coupled with robust ICT exports, and also general
manufacturing sector plays an important role in goods exports
Development of services exports by sector

19
Imports increasing in nominal terms but slightly decreasing as a % of GDP
Import of goods and services, volume change YoY
Source: Statistics Estonia Source: Statistics Estonia
Import of goods and services, share in GDP
Composition of import of goods by country, 2019 Composition of import of goods by sector, 2019
65 65 65 66
69 71 73 71 70
56
68
80
84 81
78
73 74 72 71 69
0
10
20
30
40
50
60
70
80
90
100
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
%ofGDP
-6.2
-30.6
21.3
27.2
9.7
2.4 3
-1.9
6 4.2 5.7 3.7
-35
-25
-15
-5
5
15
25
35
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
%changeYoY
[CELLRANGE]
[CELLRANGE]
[CELLRANGE]
[CELLRANGE][CELLRANGE]
[CELLRANGE]
[CELLRANGE]
[CELLRANGE]
[CELLRANGE]
[CELLRANGE][CELLRANGE][CELLRANGE][CELLRANGE][CELLRANGE]
[CELLRANGE][CELLRANGE][CELLRANGE][CELLRANGE]
0.0
0.5
1.0
1.5
2.0
2.5
EURbillions
1
2
3
4
EURbillions
Imports play a large role for a small economy
-6.2
-30.6
21.3
27.2
9.7
2.4 3
-1.9
6 4.2 5.7 3.7
-35
-25
-15
-5
5
15
25
35
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
%changeYoY

Household finances
20
Households have healthy finances backed by rising dwelling prices
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
20%
30%
40%
50%
60%
70%
80%
90%
100%
110%
120%
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
EUR million%
Household debt as % of income, lhs
Disposable income, gross, rhs
Financial liabilities, rhs
60
80
100
120
140
160
180
200
220
240
Index, 2010=100
Total Apartments Houses
Dwelling price indices
Source: Statistics Estonia, Bank of Estonia Source: Statistics Estonia
0
1,000
2,000
3,000
4,000
5,000
6,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
EUR million
Source: Pensionikeskus
Household debt relative to disposable income
60
65
70
75
80
85
90
95
100
105
110
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Apr-16
Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
Apr-18
Jul-18
Oct-18
Jan-19
Apr-19
Jul-19
Oct-19
Jan-20
Apr-20
Index
Economic sentiment indicator
COVID-19 affects economic sentiment
Source: Estonian Institute of Economic Research
Net pension assets

Climate policy and energy sector
21
Estonia is largely self-sufficient in energy production and moving towards renewables
• Estonia has already met its 2020 renewable energy target of 25% in gross
final energy consumption and is on good track to meet the 2030 target of 42%
• Estonia is among the least dependent EU countries on energy imports thanks
to the oil shale reserves in Estonia and increasing renewable energy capacity
• Due to environment and climate policies, the share of the oil shale energy is
diminishing (production of oil shale electricity fell by half in 2019), and renewable
energy production is increasing
• Renewable energy made up 51% of total Estonian power output in the first
three months of 2020 (1)
• Of the renewable energy 49% was wind power, 47% biomass, biogas and
waste, and the rest hydroelectric and solar energy (1)
• In 2019, the renewables totalled 30% of electricity production (1)
• Renewable energy accounted for 24% of the total electricity consumption in
Q1 2020 (1)
• In 2019, the share of renewable energy was 21% (1)
• By 2030, the goal is to achieve a share of at least 30%
• Estonia aims to reduce greenhouse gas emissions by almost 80% by 2050
compared to 1990 emission levels
• This entails reduction of 70% by 2030 and 72% by 2040
• The objectives are in line with those of the Paris Agreement
• Estonia will also meet the EU’s 2020 renewable energy target, and supports
the EU’s long-term climate neutrality target by 2050
• Estonia’s strategy to reach emission reduction targets is based on:
 Increasing the share of renewables in the energy sector
 Reducing burning of oil shale and refining it into higher value-added products
such as shale oil and using the by-product gas for electricity
 Modernisation of the vehicle fleet and public transport
 Supporting the reconstruction of the building stock
30
40
50
60
70
80
90
100
CO2emissions,Index,1990=100
Estonia European Union - 28 countries
0%
5%
10%
15%
20%
25%
30%
35%
Shareofrenewableenergyingross
finalenergyconsumption
Estonia EU - 28 countries
Source: Eurostat
Source: International Energy Agency
Renewables play a large role in Estonia
Total emissions have come down drastically
Source: (1) Elering

0%
1%
2%
3%
4%
5%
6%
7%
Interest rate on loans to households
Interest rate on loans to non-financial corporations
Interest rate on EUR deposits of households
Interest rate on EUR deposits of non-financial corporations
Interest rate on loans and deposits
Stable and profitable banking sector
23
Well-capitalised banking system with solid interest rate margins
Ownership structure of Estonian banking sector
Source: (1) Estonian Financial Supervision Authority; (2) ECB
Strong capital adequacy position
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2011 2012 2013 2014 2015 2016 2017 2018 2019
Total ratio Estonia CET1 ratio Estonia
CET1 ratio eurozone SIFIs Minimum total capital requirement
Sweden,
56.7%
USA,
14.6%
Finland,
6.5%
Norway,
6.5%
Estonia,
9.0%
Others,
6.7%
By owner’s residency as of 5 May 2020
• Estonia’s banking sector predominantly comprises subsidiaries of
larger, well-capitalised Nordic banks
• As of 5 May 2020, nearly 70% of the banking sector was Nordic-
controlled. The US share arises from Blackstone’s ownership share
of Luminor Bank
• The parent banks have a proven propensity to support their
subsidiaries if needed
• Estonian banks have on average the highest CET1 ratio of any
euro area country according to ECB’s Q4 2019 statistics
• Interest rate margins have been resilient and remain at
healthy levels, with the difference between interest on household
loans and deposits at 3.62% at the end of Q1 2020 (1)
(1) (1)
(1)(2)
Source: (1) Bank of Estonia
Source: Estonian Financial Supervision Authority

0%
10%
20%
30%
40%
50%
0
5
10
15
20
25
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
Dec-19
EUR billions Stock of non-residents' deposits, EURbn
Stock of residents' deposits, EURbn
Growth of deposits, % (rhs)
-10%
0%
10%
20%
30%
40%
50%
60%
70%
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
Dec-19
Total growth of loan stock, %
Growth of loan stock to resident non-fin.
corporations, %
Growth of loan stock to resident
households, %
Sustained growth in loans and low NPLs
24
Non-performing loans have decreased substantially and lending growth is conservative
Development of non-performing loans Loan growth in the banking system
Source: Bank of Estonia Source: Bank of Estonia
Loan-to-deposit ratio
Growth of deposits
0%
1%
2%
3%
4%
5%
6%
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
Dec-19
Overdue loans, over 90
days, share in loan
portfolio, %
0%
50%
100%
150%
200%
250%
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
Dec-19
Loan to deposit ratio, %
Loan to deposit ratio of
residents, %
Loan to deposit ratio of non-
residents, %

63.2
50.9
41.4
39.1 37.6
35.0
31.2
20.1
11.2
0
10
20
30
40
50
60
70
2014 2015 2016 2017 2018 2019
Outgoingpayments,EURbillion
TOTAL USD
8.5%
6.6%
4.3%
1.3% 0.5% 0.3%
0.5%
1.2%
3.6%
10.6%
9.6%
8.4%
10.0%
6.2%
6.1%
19.1%
16.2%
12.7%
11.8%
7.9% 10.0%
11.4%
9.2%
6.6%
2.8%
1.5% 1.0%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Shareoftotaldeposits
Off-shore deposits Deposits from platform holders
Other non-resident deposis Non-resident total
All non-residents outside EU
Money laundering risks have declined
25
Estonia has taken multiple measures to tackle money laundering
Dynamics of non-resident deposits
• In recent years, Estonia has taken multiple steps to reduce the risks
of misuse of the banking system
• Combating money laundering has been a strategic priority
for Estonian FSA since 2016 and an area of focus since 2014
• Legislative changes to Money Laundering and Terrorist
Financing Act are currently before Parliament
• Forced and guided closures of high-risk business lines of
multiple credit institutions and total closure of Danske Bank’s
operations in Estonia
• The share of non-resident deposits in the banking system has
declined sharply and the non-resident composition has changed
with non-residents outside EU being only 1% of the total in 2019
• Outgoing payments, especially in USD, have diminished greatly
Outgoing payments per year, EUR billion

0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2012 2013 2014 2015 2016 2017 2018 2019 2020e 2021e
Estonia,EURmillion
Forecast: Government revenue
Total government revenue
Forecast: Government spending
Estonia – Model for fiscal prudence
27
Prudent fiscal policy in long-term and low tax relative to GDP
-0.3
0.2 0.7 0.1
-0.5 -0.8 -0.6 -0.3
-9.0%
-7.0%
-5.0%
-3.0%
-1.0%
1.0%
2012 2013 2014 2015 2016 2017 2018 2019
Governmentbudgetdeficit/
surplus,%ofGDP
Estonia Euro area Belgium
Ireland France Finland
22.6
32.8
38.7 40.1 40.5 42.2 42.3
44.8 45.1 46.5
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Tax-to-GDPratioin2018,%
Gross Debt-to-GDP ratio Tax-to-GDP ratio
Budget surplus/deficit Total general government spending and tax revenue
Total general government spending
Source: European Commission
Source: (1) Eurostat; (2) Estonian Ministry of Finance, forecasts as of 15 April 2020
(The forecasts on revenue and expenditure are subject to change)
Source: Eurostat
Source: Eurostat
8.4
35.1
48.6
58.8 59.4 59.8
70.4
84.1
98.1 98.6
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
GeneralgovernmentgrossDebt-to-
GDPratioin2019,%
(1)
(2)
(1)
(2)

Low tax rates boost competitiveness
28
Low tax rates provide competitiveness and buffer for fiscal balancing
12.5
20.0 20.0
21.4 22.0
25.0 25.0 25.0
29.9
32.0
10%
15%
20%
25%
30%
35%
Topstatutorycorporateincometax
ratein2020,%
10.7
14.7 14.8 15.1
26.6 28.3 29.3 30.6
32.9
39.8
55.1
0%
10%
20%
30%
40%
50%
60%
Overallimplicittaxrateoncapitalin
2018,%
20.0
32.0
40.0
47.5 49.5 50.0 51.1 51.5 52.3 53.1
55.9
0%
10%
20%
30%
40%
50%
60%
Maximumpersonalincometaxrate
in2020,%
33.2
37.2 37.3
41.9 42.6 42.7
46.7 47.9 49.4
52.2
0%
10%
20%
30%
40%
50%
60%
Taxwedgeonlabourin2019,100%of
earnings,%
Tax on capital Tax wedge on labour
Corporate income tax Personal income tax maximum rate
The main principles of Estonian tax policy are (1) simple tax system and (2) broad tax base and low rates. The structure of the tax
system is growth-enhancing with relatively small deadweight losses, and the tax collection system is efficient. Taxes are divided into
state taxes and local taxes to ensure sustainable and socially and regionally balanced growth. CIT, PIT and VAT are all state taxes.

Social protection
34.1%
Education
14.9%
Health
14.6%
Economic
affairs
13.6%
General public
services,
8.1%
Defense
5.6%
Public order and safety
4.8%
Recreation, culture and religion
3.8%
Housing and community
amenities
0.5%
Government spending – future growth
29
Government spending aims to fuel future growth, with ageing not a serious problem
Education
15%
Transport
13%
Entrepreneurship
and innovation
12%
Research and
development
12%
Energy
7%
Regional
development
7%
Environment
6%
Labour market
6%
Other sectors
22%
19.3
22.1
23.6
27.6
28.5
29.8 30.2 31.0
16
18
20
22
24
26
28
30
32
PercentagepointsofGDP
-0.8
2.1
2.6
3.0
3.6
4.1
5.0
6.3
-1
0
1
2
3
4
5
6
7
PercentagepointsofGDP
Estimated change in age-related spending 2016-2070
Change in age-related spending 2016-2070Age-related spending in 2016
Estonia’s age-related spending is at low levels
Source: The 2018 Ageing Report, European Commission Source: The 2018 Ageing Report, European Commission
Total sectoral EU contribution + own contribution: EUR 3.72bn
Distribution of the original state budget for 2020
Total state expenditure was approved at EUR 11.7bn
Source: Ministry of Finance
Distribution of European Structural Funds 2014-2020

Government invests in the future
30
Government spending in education and R&D aims to fuel sustainable future growth
Consistently high education expenditure
Government sector R&D expenditure comparison
Source: Eurostat
Source: Eurostat Source: Eurostat
7%
9%
11%
13%
15%
17%
2010 2011 2012 2013 2014 2015 2016 2017 2018
Educationexpenditure,%oftotal
generalgovernmentexpenditure
Estonia Ireland Belgium Finland
Austria Euro area Germany France
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
2010 2011 2012 2013 2014 2015 2016 2017 2018
GovernmentsectorR&Dexpeditureas
%ofGDP
Estonia Netherlands Denmark Ireland
• Education and R&D have been at the core of the government
policies during the past years
• Spending on education relative to total government
expenditure is the highest in the European Union at 15.8%
in 2018(1)
• Although government R&D expenditure relative to GDP is not a
high absolute figure, it compares well to peers
• The current government (elected in 2019) has a priority policy
objective to increase state financing of R&D to at least 1% of
GDP – more than six-fold increase from 2018
• Furthermore, the recent COVID-19 response package
includes support for domestic research and development of
tracking and tackling the coronavirus
Government investments are at a robust level in Estonia
4.9
4.2
3.6
3.4
3.1 3.0
2.8
2.6 2.5
2.3
2%
3%
3%
4%
4%
5%
5%
6%
Grossfixedcapitalformation,%of
GDPin2019
Source: (1) Eurostat

14.2
12.0
10.9
10.1 9.8
9.1 8.5
7.8
6.5
5.5
4.6
3.3 2.9
0%
2%
4%
6%
8%
10%
12%
14%
16%
Pension system and social security
31
Pension system and social security funds deliver financial security to Estonians
Estonians stay in employment until an older age than peers
Source: EurostatSource: Pensionikeskus
I pillar: State pension
• Retirement age is ~64 years. By 2026, the retirement age will be
increased to 65
• The state pension operates on a PAYG basis
• The state pension is paid by the state mainly from social tax receipts.
II pillar: Mandatory funded pension
• Employees pay a monthly 2% of their gross salary to their selected
pension fund from an approved list, with the state adding 4%
• II pillar pension funds are privately managed
• The parliament aims to make II pillar voluntary
III pillar: Supplementary funded pension
• Voluntary contributions to a pension fund, with some tax benefits
• III pillar pension funds are privately managed
The Health Insurance Fund
• Receives the majority of its revenue from the Government, namely a
defined share of social tax collected
• Organizes national health insurance to provide insured people (over
90% of the population) with access to necessary healthcare services,
medicines, medical equipment and cash benefits
The Unemployment Insurance Fund
• Administers the social insurance provisions related to unemployment,
and organizes labor market services that help unemployed persons
find new employment
• Funded by insurance premiums (1.6% + 0.8% of gross salary)
The Estonian pension system consists of three pillars: There are two social security funds in Estonia
Employers pay 33% social tax based on the salaries of their employees, part of which is directly transferred to the health
insurance fund, with the remainder nominally allocated to the payment of the state pension
40%
65-70%
Expected pension, % of last salary
Pension system structure
Employment rate, persons 65 years or older, 2019
The pillars I and II combined
provide about 40% of pre-
retirement income. The
additional saving of pillar III
should rise the total to
around 65-70%.

Educated and
Competitive Estonia
32

17.4
21.6
25.9
28.7
31.1 31.4
33.1 33.7
34.8
36.0 36.5
38.5
40.7
15%
20%
25%
30%
35%
40%
45%
Lower secondary education or lower, % share of total 15-64 year population in 2019
The leading European country in education
33
Deep penetration and high quality of education – building blocks for future growth
Few people with only lower secondary education or lower
Source: Eurostat
High attainment of tertiary education
Source: Eurostat
Tertiary Education, % share of total 15-64-year population in 2019
15.8
16.9
18.7
19.5
20.8 21.0
23.4 23.7
25.5 25.9 26.1
28.0
10%
15%
20%
25%
30%
Mean score in PISA 2018
Reading Mathematics Science
Average of Reading,
Mathematics, Science
Estonia 523 523 530 526
Finland 520 507 522 516
Poland 512 516 511 513
Ireland 518 500 496 505
Slovenia 495 509 507 504
United Kingdom 504 502 505 503
Sweden 506 502 499 503
Netherlands 485 519 503 502
Denmark 501 509 493 501
Germany 498 500 503 500
Belgium 493 508 499 500
Czech Republic 490 499 497 495
United States 505 478 502 495
France 493 495 493 494
Portugal 492 492 492 492
Austria 484 499 490 491
OECD average 487 489 489 488
Latvia 479 496 487 487
Spain - 481 483 482
Lithuania 476 481 482 480
Hungary 476 481 481 479
Italy 476 487 468 477
Luxembourg 470 483 477 477
Croatia 479 464 472 472
Slovak Republic 458 486 464 469
Malta 448 472 457 459
Greece 457 451 452 453
Cyprus 424 451 439 438
Romania 428 430 426 428
Bulgaria 420 436 424 427
Estonia is the top European country in PISA tests
Source: OECD, Programme for International Student Assessment, PISA 2018 results

0
10
20
30
40
50
60
70
80
90
100
Institutions
Infrastructure
ICT adoption
Macroeconomic
stability
Health
Skills
Product market
Labour market
Financial system
Market size
Business
dynamism
Innovation
capability
Estonia CEE peer group average* Nordic peer group average**
Global Competitiveness Report
34
Estonia is characterised by dynamism, strong institutions and lead on ICT
Source: World Economic Forum, The Global Competitiveness Report 2019
* CEE peer group: Latvia, Lithuania, Slovenia, Slovakia, Poland, Czech Republic, Croatia, Hungary
** Nordic peer group: Finland, Sweden, Denmark, Norway, Iceland
Highlights for Estonia
• Despite being a small economy, Estonia ranks well in World
Economic Forum’s Global Competitiveness Report 2019
with the overall rank of 31
• Estonia’s strengths are firmly based on strong institutions,
adoption of ICT, macroeconomic stability, healthy and
skilled population, flexible labour market and dynamic
business environment
• Market size is an obvious drawback but at the same time
Estonia is an export-oriented economy, and World Economic
Forum sees room for improvement in infrastructure
compared to the peer group
Estonia ranked top 10 worldwide in sub-categories:
Category Estonia's rank
Banks' regulatory capital ratio 2
Competition in services 4
Credit gap 1
Debt dynamics 1
Digital skills among active population 8
Efficiency of seaport services 8
Electricity access 2
Flexibility of wage determination 1
Inflation 1
Mean years of schooling 4
Mobile-broadband subscriptions 5
Non-performing loans 7
Organised crime 5
Quality of land administration 6
Time to start a business 8
Trade tariffs 7
Trademark applications 9
Estonia’s performance by category

2
9
11
13
15
16
32
35
43
0 20 40
Finland
Belgium
Estonia
Germany
Ireland
Austria
France
Slovakia
Italy
2019 World Press Freedom Index rank
Stability and competitiveness
35
Estonia is a free and sustainably competitive society with effective governance
2
7
11
14
15
20
22
23
29
0 10 20 30
Finland
Estonia
Austria
Ireland
Germany
France
Slovakia
Belgium
Netherlands
6
10
14
20
22
27
29
48
64
0 20 40 60
Ireland
Estonia
Netherlands
Finland
Sweden
Germany
Austria
Belgium
France
Global Sustainable Competitiveness Index 2019 rank 2020 Index of Economic Freedom rank
Source: 2020 Index of Economic Freedom,
The Heritage Foundation
Source: 2019 World Press Freedom Index,
Reporters Without Borders
Source: The Global Sustainable Competitiveness Index 2019,
SolAbility
Press freedom Sustainable competitiveness Economic freedom
90
66
85
92
87
90
94
60
84
86
88
90
88
52
92
84
89 88
75
61
80
86
79
64
50
55
60
65
70
75
80
85
90
95
100
Voice and
Accountability
Political Stability and
Absence of Violence
Government
Effectiveness
Regulatory Quality Rule of Law Control of
Corruption
Percentilerank
Estonia 2018 Belgium 2018 France 2018 Latvia 2018
Source: 2018 Worldwide Governance Indicators, World Bank
• Estonia has a strong, stable and well-
functioning governance system
• The country compares well to its Western
European peers in Worldwide Governance
Indicators
• Stable governance aids growth and
encourages investments into the country
• Business-friendliness is a key competitive
advantage for Estonia, and it ranks highly in
World Bank’s Ease of Business index, and is
also judged sustainably competitive
• Estonia is a free society with high rankings in
both press freedom and economic freedom
Strong governance framework in Worldwide Governance Indicators
Ease of doing business
10
18
20
22
24
27
32
42
46
0 20 40
Sweden
Estonia
Finland
Germany
Ireland
Austria
France
Netherlands
Belgium
Source: Doing Business 2020,
World Bank
2019 Ease of Doing Business index rank

COVID-19 response and effects
37
Rapid response to the COVID-19 pandemic
 Self isolation of people with COVID-19 and their families
 All public gatherings banned. Museums, theatres, cinemas, spas, swimming pools etc. were closed
 Schools and universities closed. Individual local governments to decide on opening of the kindergartens
 Border controls introduced on March 17th prohibiting entry of all but Estonian citizens, permanent residents and their relatives,
and workers involved in freight transport. People arriving in Estonia must self-isolate for 14 days
 Internal travel restrictions to Estonian islands
 No visitors allowed in hospitals, social and elderly care houses and prisons
 Shops, bank branches and cafes need to follow social distancing rules
 The state of emergency was not renewed and came to an end on 17 May 2020
 However, the Government decided on 16 May 2020 that health care emergency measures should stay in place, including the
requirement for people with COVID-19 and their families to self-isolate for 14 days, and that schools could start to re-open
 In addition, restrictions on other activities are to be gradually relaxed: for sports events, public meetings and entertainment from
1 June, and for restaurants, cafes, theatres and cinemas from 1 July 2020. Restrictions on border controls with Finland, Latvia
and Lithuania were also relaxed from 16 May 2020
 The Ministry of Finance at the end of March forecasted a 8% fall in GDP in 2020, taking into account the impact of the lockdown
and the rapid slowdown in economic activity. At the same time GDP growth forecast for 2021 was set at 8%.
 Unemployment in Estonia will increase, and registered unemployment rate reached 7.5% at the end of April 2020, up from
5.7% at the end of February 2020 (1)
 Since the forecast in March, the Supplementary Budget has been approved by the parliament with measures totalling EUR
2.8bn, or 10.8% of the GDP (est. EUR 25.9bn in 2020)
 The Supplementary Budget is to balance the economic impact of the lockdown and economic slowdown and likely to result in a
smaller fall in GDP than forecasted in March 2020. New forecasts will be prepared over the summer
 Special governmental committee formed to manage, supervise and make decisions regarding the COVID-19 pandemic.
 The committee is led by the Prime Minister and includes ministers from relevant areas – finance, economy, social affairs,
internal affairs etc.
Declaration of
Emergency,
12 March 2020
State of emergency
lapsed, 17 May 2020
Governance and
supervision
Expected Economic
Impact
Source: (1) Estonian Unemployment Insurance Fund

Fiscal and financial budgeting
38
COVID-19 and response measures will lead to budget deficit – funding secured
The government’s 2020 Supplementary Budget in April 2020
to tackle the spread of the virus and to develop measures to
support the economy going forward:
• To cover the direct expenditure for the health care system and
other areas stemming from the COVID-19
• To preserve salaries for citizens
• To support SMEs and large businesses
• To provide economic stimulus to facilitate exiting the current
economic slowdown
The 2020 Supplementary Budget measures total EUR 2.8bn
(10.8% of GDP)
The Ministry of Finance forecasts a EUR 1.3bn (5.1% of GDP)
decrease in tax collections in 2020 compared to the budget
approved in December 2019
• - EUR 461 million collection of social insurance taxes
• - EUR 328 million of VAT collection
• - EUR 310 million of income tax collection
• - EUR 142 million of excise duties collection
COVID-19 response measures Fiscal impact of the pandemic
As a result of the 2020 Supplementary Budget, the general
government budget deficit is projected to be EUR 2.62 bn
(10.1% of GDP) in 2020
The projected general government budget deficit will result to
Central Government funding requirement of EUR 3.78 bn
(14.6% of GDP) in 2020 and EUR 1.2 bn (4.3% of GDP) in 2021
The general government debt is expected to increase to 22%
of GDP by end-2020 from 8.4% in 2019
The Government is temporarily halting its contributions to second
pillar pension funds from 1 July 2020 to 31 August 2021
• Will increase revenue by EUR 142 million
On 13 March 2020 the Estonian State Treasury increased its T-
Bill programme amount from EUR 400mn to EUR 1bn
On 27 March 2020 the Republic of Estonia signed a EUR
750mn 15-year loan agreement with the Nordic Investment
Bank (NIB) and has secured a EUR 200mn financing facility
loan from the Council of Europe Development Bank
On 13 April 2020, the Parliament decided to deploy the full
balance of the Stabilisation Reserve Fund (EUR 430 million)
to cover costs stemming from the COVID-19 pandemic and to
reduce related economic risks during 2020 and 2021
Estonia is contemplating raising additional longer-term funding
through capital markets in the form of EUR bonds
Securing the fundingImpact on public finances

April Supplementary Budget
39
EUR 2.8bn (10.8% of GDP) supplementary budget
Measure EUR millions % GDP
Share of
total
package
On-lending to businesses
- EUR 550mn support for SMEs and large businesses (Direct lending via Kredex SA)
- EUR 200mn support for Agricultural Business via direct lending by Rural Development Foundation and for expected
losses on guarantees given to third-parties guaranteed by the Foundation
750 2.9%
Additional expenditure and investments
- EUR 230mn for Special reserves to cover expected and unforeseen expenditure from COVID-19 pandemic
- EUR 80mn for direct expenditure for purchases of PPE, testing, ventilators etc
- EUR 150mn for unforeseen expenditure reserve
- EUR 222mn grants for support of i) the transport sector ii) tourism, iii) construction sector and iv) development of fast
internet connection to remote areas
- EUR 130mn for local governments
- EUR 30mn for direct costs from COVID-19 and compensation for the loss in revenues
- EUR 100mn for support investments and road maintenance
- EUR 27mn for supporting artists and athletes for cancellations of sports and culture events and compensation for the loss
in revenues of churches
- EUR 19mn for schools, universities and R&D for covering the costs of exiting the state of emergency and to finance
analysis of the spread of COVID-19, to develop testing etc.
628 2.4%
Additional expenditure by social security funds
- EUR 224mn for increased expenditure by the Health Insurance Fund
- EUR 250mn for increased expenditure by the unemployment benefit funds
474 1.8%
Changes to tax and interest rates
- EUR 269mn for excise duties on electricity, gas and diesel have been reduced from 1 May 2020 to 30 April 2022
- EUR 88mn for lowering tax interest rates and other tax rates
357 1.4%
Provisions for losses from guarantees
- EUR 300mn for losses from guarantees given to third parties by Kredex
300 1.2%
Increase in share capital of state-owned companies 300 1.2%
TOTAL ~EUR 2,800mn 10.8%

0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
0
200
400
600
800
1,000
1,200
1,400
1,600
EURmillion
Liquidity Reserve Stabilisation Reserve Fund
MoF's debt portfolio % of GDP (rhs)
Republic of Estonia funding
41
0
500
1,000
1,500
2,000
2,500
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020*
2021*
2022*
2023*
2024*
2025*
2026*
2027*
2028*
2029*
2030*
2031*
2032*
2033*
2034*
2035*
EURmillion
New borrowing Redemptions MoF's debt
Borrowing and redemption projection *
Financial reserves
Source: State Treasury of Estonia
* Assuming a EUR 1bn 10-year bond transaction in 2020
• The Republic of Estonia set up a EUR 400 million domestic T-
bill programme in March 2019 in order to diversify its funding
sources
• In March 2020, the programme size was increased to EUR 1bn
• Since the launch of the programme, Estonia has conducted
three EUR 100mn-400mn auctions of 6-and 12-month bills
• On 7 May 2020 the outstanding amount of T-bills was EUR
675mn
• The plan is to have auctions 2-4 times a year depending on
maturity profile and funding needs
• Balanced budget policies have kept Estonia’s borrowing needs
at very low levels
• At the end of 2019, the MoF’s financial reserves (EUR 1.4bn)
were twice as large as the amount of the MoF’s outstanding
debt obligations (EUR 700mn)
• The MoF has had a positive net financial position (where
financial reserves exceeded debt) at least since 2004
• The current funding consists of:
• European Investment Bank: EUR 570mn
• Nordic Investment Bank: EUR 750mn
• T-Bills: EUR 675mn
T-Bill programme launched in May 2019
Historically, funding needs have been fully met by long-term loans from IFIs

0
1
2
3
4
5
6
7
8
9
Years
Average maturity
Funding outlook and strategy
42
Funding is well-diversified between IFI loans, T-bills and, going forward, bonds
Planned debt portfolio composition – 30 June 2020
Total planned debt 30 June 2020: ~EUR 2,700 million
Average maturity of debt
• As a result of the 2020 Supplementary Budget the general
government budget deficit is projected to be EUR 2.62 bn
in 2020, and the Central Government funding requirement
to total EUR 3.78 bn in 2020 and EUR 1.2bn in 2021
• With these increased nominal funding needs of Estonia, the
Debt to GDP ratio is expected to increase to 22% by end-
2020 from 8.4% in end-2019
• The Republic of Estonia has already secured a EUR 750mn
bilateral loan facility from the Nordic Investment Bank and a
EUR 200mn financing facility loan from the Council of Europe
Development Bank, with the rest of the funding need in 2020 to
be covered by an increase in the outstanding T-bill stock and
with EUR benchmark Government bond borrowing
• After the planned EUR 1bn 10-year transaction, Estonia
plans to issue 1-2 more benchmark bonds in 2020-2021
• In terms of refinancing risk, the average term-to-maturity will
increase markedly from 4 years as of end-2019 to 7 years
as of end-2020 - close to the average term-to-maturity of 8
years for OECD countries*
• Going forward, the MoF’s plan is to build up the stock of T-
bills and then use a combination of capital markets
issuances and loans from European supranationals to
cover funding needs
* Source: OECD Sovereign Borrowing Outlook 2020
IFIs
45%
Eurobonds
35%
T-bills
20%
* Assuming a EUR 1bn 10-year bond transaction in 2020

Indicative key terms
44
Key terms of the contemplated EUR sovereign bond transaction
Issuer: Republic of Estonia
Issuer Ratings: S&P: AA- (positive) / Moody’s: A1 (stable) / Fitch: AA- (stable)
Format of the Notes: Regulation S Registered note offering under standalone documentation
Status of the Notes: Senior unsecured
Tenor: 10 years
Currency: Euro
Size: Benchmark
Maturity Date: [ ] 2030
Coupon: Fixed, annual, ACT/ACT (ICMA)
Denominations: EUR 1,000 / EUR 1,000
Listing: Irish Stock Exchange's Regulated Market
Governing Law: English law
Target Market: Eligible counterparties, professional clients and retail clients (all distribution channels)
Joint Lead Managers: Citi, Nordea, Societe Generale

Updated economic information
45
A summary of main data releases between 25 May 2020 and 1 June 2020
Macroeconomy
 GDP 2020 Q1: -0.7% YoY and -3.7% QoQ (down from 4.3% in 2019 and 3.9% in 2019 Q4) (1)
 Wage growth 2020 Q1: 4.8% YoY (down from 7.5% in 2019 and 6.4% in 2019 Q4) (1)
 Registered unemployment May 2020: 7.8% (2)
 Industrial production 2020 April: -16.9% YoY and -8.4% MoM (1)
 Retail sales volumes 2020 April: -15% YoY and -13% MoM (1)
Budget deficit
 General government budgetary deficit 2020 Q1: 1.7% of GDP (3)
 Deficit was 1.1% larger than 2019 Q1
Tax receipts
 Tax revenues 2020 Q1: EUR 2,023.3 million (-3.2% YoY) (4)
 Tax revenues 2020 January-April: EUR 2,736.2 million (-4.1% YoY) (4)
 Budget execution 2020 Q1: 19.2% (22% in 2019 Q1) (4)
Tax debt
 EUR 396 million as of end-April 2020 (4)
 Represents a 46% increase vs. 2019
The MoF’s financial reserves
 As of end-March 2020, total of EUR 1.18 billion (of which the Liquidity Reserve EUR 768.5 million and
the Stabilisation Reserve Fund EUR 411 million) (3)
 As of end-April 2020, total of EUR 1.74 billion (of which the Liquidity Reserve EUR 1.31 billion and
the Stabilisation Reserve Fund EUR 431.4 million) (3)
Source: (1) Statistics Estonia; (2) Estonian Unemployment Insurance Fund; (3) Ministry of Finance; (4) Estonian Tax and Customs Board

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