Development cooperation in Ukraine: Estonia’s chance to shape Europe for decades to come

The 2026 Ukraine Recovery Conference (URC2026) in Gdańsk, Poland, was the next milestone in a massive undertaking that has, in fact, already begun. According to the World Bank's estimates, Ukraine’s reconstruction will cost approximately 600 billion USD over the next decade. This is not abstract aid money, but an investment over which there is fierce competition, with positions being formed as we speak.  

Those who wait will be left behind 

In Estonia, development cooperation is still too often viewed merely as the provision of aid. In reality, it is a strategic tool, a way to promote our own foreign policy and economic interests, shape security, build long-term partnerships and open doors to places where a single company or institution could not enter alone.  

In the case of Ukraine, Estonia's values and interests overlap exceptionally clearly. The stronger, more transparent and more closely tied to Europe Ukraine is, the safer Estonia will be. Therefore, we must move away from considering development cooperation an idealistic side activity. We must treat it as a core part of Estonia's strategic presence in Europe. For this reason, development cooperation must be a national priority bolstered by support from politicians and society at large. Ukraine is not the only country to benefit from this. Increased support for development cooperation will strengthen Estonia's security, increase economic opportunities and improve international visibility and influence, likely even more than we realise.  

Ukraine's reconstruction process has already been ongoing for the past four years with thousands of decisions made in Ukrainian ministries, local municipalities and at the tables of international donors. The people who have access to these rooms are those who have already built trust. A clear advantage belongs to those who have been part of the process for the past four years, who understand Ukraine’s actual needs, who have proven their ability to deliver on their promises.  

Estonia's strengths: reform experience, speed and flexibility 

Estonia's currency is its experience and knowledge of Ukraine's historical and cultural context. Over the past 30-plus years, we in Estonia have built a functioning digital state, implemented complex reforms and created institutions that work. Furthermore, reconstruction in Ukraine is increasingly being tied to reforms, like improving the tax system, putting in place anti-corruption mechanisms and increasing the transparency of public procurement. Estonia's experience makes us a reliable partner who has walked the exact same path. This is exactly what Ukraine needs—a partner who offers practical knowledge rather than abstract promises. 

Lasting solutions are born from understanding Ukraine's actual needs, rather than transferring ready-made models. For example, in preparing the analysis for education technology and education reform, Estonia engaged over 65,000 local teachers, parents and school leaders to ensure that the solutions being created would truly align with the expectations of Ukrainian society.  

Estonia's advantage lies in its speed, flexibility and ability to link reform experience with practical solutions. We have the ability to move quickly, test smartly and turn ideas into functioning systems. It is precisely this that allows a small country to be more influential in Ukraine than our budget might initially suggest.  

Foreign donors amplify Estonia’s impact 

Estonia's influence in Ukraine has grown beyond our own efforts to include the international capital, partners and trust we can gather around us. This directly reflects the economic dimension of development cooperation, which is often underestimated in Estonia. In 2025, the Estonian Centre for International Development (ESTDEV) partnered with over 70 organisations from the public sector, private sector, academia and civil society. A broad circle of donors—the European Commission, Germany, Sweden, Norway, Japan, Ireland, Taiwan, the United Arab Emirates, the USA and many others—shows that Estonia's credibility is internationally established capital.  

The result of this trust is a structural change: in 2026, for the first time, Estonia's development cooperation will be funded more by foreign donors (23 million euros) than by state budget funds (16 million euros). This means that every euro contributed by Estonia brings in additional international funding and magnifies the investment; for example, in 2025, every euro received from the Estonian state budget grew 1.67 times with the help of external funds. While Estonia will contribute 74.7 million euros to Ukraine's reconstruction and development between 2022 and 2027, this will have a significantly larger impact when combined with the leveraged funding. Every million euros brought into Estonian projects from foreign funding brings an estimated 300,000 euros back into the Estonian economy as tax revenue through the involvement of our experts and companies.  

Development cooperation is also a practical form of economic diplomacy. The state can create the trust, standards and contacts upon which Estonian companies and experts can build in Ukraine, and later in other markets as well. It opens doors, lowers barriers to entry and increases Estonia's visibility in areas where the private sector and entrepreneurs have something important to offer.  

The window of opportunity will not remain open for much longer 

The next two to three years will determine who is at the table during the next phase of Ukraine's reconstruction. In 2027, the Ukraine Recovery Conference will take place in Estonia. The value of this opportunity depends on the substance we bring to it.  

The biggest risk is that Estonia's influence remains merely the sum of small, isolated initiatives that will not generate enough visibility, continuity or weight to shape larger processes. For Ukraine, the ability to act consistently, reliably and in a way that is strategically understandable to other parties is as valuable as the financial amount of the contribution. Individual projects do not create long-term impact but systems that continue to function even in crisis situations do. For Estonia, this means we need to design solutions to become embedded in Ukraine's reforms, institutions and daily governance. Only then does visibility develop into lasting impact.  

Defence spending is not the only way to build security. It is also built through strong partners, functioning institutions and transparent governance, of which development cooperation is a structural part. This is an investment in a safer Europe, a stronger Ukraine and a more competitive Estonian economy. If Estonia seizes its opportunity now, we will secure a place among the architects of one of the most important European processes of the next decade. There is no time to wait.

Originally published by ERR