Estonia, Financial Services, Funds, Legislation

The State has a total of 67 foundations, 38 of which managed to make ends meet or even earned a profit last year.

Andrus Treier, the CEO of Kredex that earned the biggest loss – 3.2 million euros – stated that the 2011 financial results were caused by risks taken during the recent economic crisis. “The volumes of Kredex’ guarantees and loans grew significantly during the crisis years; we assumed remarkable risks in financing enterprises in order to help them survive the difficult times,” he said.

Treier estimated that Kredex’ results could not be compared to other foundations where the State was among stakeholders, as the role of this foundation is to provide guarantees on loans. If the economic situation deteriorates, the share of problematic loans increases as well, he explained.

CEO of the Northern Estonian Regional Hospital Tõnis Allik stated that their foundation’s last year’s financial results were mostly affected by two factors: the Health Insurance Fund paying for medical services with the coefficient of 0.95 in 2011 and exceeding the volumes in the medical services contract concluded with the fund.

“The Health Insurance Fund left 2.7 million euros worth of medical bills unpaid,” said Allik. He added that the value added tax contributed to the loss as well: in 2011, the foundation had to pay 2.3 million euros in VAT on investments into construction works and equipment.

While foundations are not established with the objective of earning profits, the best financial results were demonstrated by the science centre Ahhaa, which earned a profit of 2.56 million euros in 2011. The Tartu University Hospital also stood out with its profit of 1.25 million euros, as did the Environmental Investments Centre and the Estonian Internet Foundation