Estonia. City of Tartu

Date of agreement:18 Mar 2021
Customer:City of Tartu
Amount in EUR:EUR 18.8 million
Maturity:15 years
NACE sector / loan type:Loan programme

Financing from NIB Environmental Bond proceeds

NEB-eligible share: 42%

NEB category: Clean transport solutions

Amount disbursed: EUR 3.9 million

Note: For loans in other currencies than EUR, the equivalent in EUR is based on the exchange rate effective for the disbursement. Read more about the NIB Environmental Bonds


The uncommitted credit facility gives the City of Tartu an option to use NIB funding for its urban development programme for the period of 2020–2023. The programme includes investments in childcare and education, traffic, social and sports infrastructure.

Projects within the childcare and educational sector include the refurbishment of two schools and a kindergarten. The renewal will ensure a modern learning environment, enhance the quality of education services, and improve the energy efficiency of buildings.

Road infrastructure investments consist of multiple construction projects aimed at improving the safety and traffic connections for pedestrians and cyclists. The programme also includes upgrading street lighting in two residential districts.

Social infrastructure investments are mainly associated with different types of social housing, including the construction of a new elderly home and a new social building, as well as the reconstruction of a homeless shelter. In addition, the programme entails the development of Tartu’s sports and recreational infrastructure.

The total investments amount to approximately EUR 38 million.

Tartu is the second largest city in Estonia and one of the oldest cities in the Baltic States. It has a population of around 97,000 inhabitants.

Fulfilment of NIB's mandate


Childcare and education:

Renovation of educational institutions will modernise the facilities that that are outdated. The modernisation will improve energy efficiency and bring energy savings. Furthermore, the investments will ensure a better learning and teaching environment due to better ventilation, heating, and cooling systems in the refurbished buildings.

Road infrastructure:

Investments in the city traffic infrastructure aim to improve the safety and throughput of the traffic for pedestrians and cyclists in locations where the infrastructure is currently insufficient. Moreover, part of the funds will be allocated for improving street lighting, resulting in better service and energy savings for the municipality.

Social infrastructure:

The main objective of the investments in social infrastructure is to improve the access to and the quality of social services. The projects will centralise some of the services and ensure they have better provision.

The new elderly home will enhance the service capacity to address the increasing demand due to an ageing population. Currently, Tartu lacks facilities that can accommodate elderly patients with physical disabilities or mental diseases. The new building will be able to host 20 people with these specific needs.

The new social building will have 56 apartments that will accommodate people in need on the basis of temporary rent. It will allow social services to be organised more efficiently, as the support is now organised through more than 500 different municipal apartments scattered across the city.


Childcare and education:

Buildings are responsible for approximately 40% of energy consumption and 36% of CO2 emissions in the EU, thus the building sector is important in climate change mitigation.

The Kroonuaia and Karlova schools and the Meelespea kindergarten are outdated and energy inefficient. The modernisation is estimated to increase the energy efficiency of the facilities by 20%.

Road infrastructure:

The investments in road infrastructure are in line with Estonia’s climate policy, where the transport sector is one of the focus areas. The planned projects will provide safer and more convenient ways of commuting for pedestrians and cyclists, thus promoting journeys on foot or by bicycle.

As part of the programme, the city will also modernise the streetlights in the Annelinn and Veeriku neighbourhoods. The new LED lamps provide better illumination and more focused light than the current system. The use of electricity is predicted to decrease by over 50% due to the modernisation.

Impact indicators in relation to the investments

  • Number of pupils in the schools/kindergarten
  • Length of roads built, km
  • Number of persons accommodated in the elderly home and social building
  • Capacity utilisation of the homeless shelter, %


  • Actual E-value [kWh/(m2/a)] of the renovated buildings upon project completion
  • Actual E-value [kWh/(m2/a)] of the new buildings upon project completion
  • Length of light traffic roads completed, km
  • Number street lightning elements installed

Sustainability summary

No significant negative environmental or social impacts have been identified in relation to the projects. The required local master plans are in place.


Press release

NIB finances urban developments in Tartu, Estonia

Press release

Põhjamaade Investeerimispank rahastab Tartu linnaarendust