Government grants support to Kymenlaakso to manage structural change

The Government has decided to grant Kymenlaakso a total of EUR 6 million to mitigate the impact of sudden structural change. The region is looking for new growth in the battery and food sectors, in particular. In all, the development package for Kymenlaakso amounts to ca. EUR 9 million.

During 2023, the prolonged structural change in Kymenlaakso has culminated as many large companies have announced change negotiations and relocations and closures of operations. In June, Stora Enso decided to close down its Sunila pulp mill and the company will also close one of the two paper machines at its Anjala paper production unit. In addition, job losses have occurred in the food industry.

Russia’s war of aggression in Ukraine has also put pressure on the regional economy of Kymenlaakso. The war and the closure of the Russian border have had considerable effects on many sectors, especially the forest industry, logistics and tourism.

Employees are supported by change security services. However, to speed up the re-employment of those who have lost their jobs in the region, comprehensive employment and business services are also necessary. The Ministry of Economic Affairs and Employment will now strengthen these services by EUR 1 million.

New growth in battery and food sectors

There is development potential in Kymenlaakso, for which the so-called AKKE funding (‘Supporting sustainable growth and vitality in the regions’) that will now be allocated is intended. 
Of the funding, EUR 3.8 million will be granted to the battery industry in Kotka-Hamina to create a significant industrial hub for the international battery sector. Business Finland also funds the battery industry in the region.

Moreover, EUR 2.2 million will be allocated to developing the food sector in the Kouvola region. Investments in RDI activities, cooperation between higher education institutions and increased internationalisation will support business growth. 

“If implemented, these projects would have a significant impact on the regional economy and employment. We can see new beginnings but they will not take off by themselves. We need a lot of work and cooperation with businesses across administrative and regional boundaries,” says Minister of Economic Affairs Wille Rydman.

EU funding from the regional and structural policy funds

In addition to AKKE funding, funding from the European Regional Development Fund (ERDF), the European Social Fund (ESF+) and the Just Transition Fund (JTF) is well available in Kymenlaakso. The funds can be used to support various development projects and create new business opportunities and jobs.

In the mid-term review of the regional aid map, the Ministry of Economic Affairs and Employment is preparing to transfer the Kotka-Hamina subregion to a higher support area I. This would mean that the public aid to companies’ investments could increase. The change would require the approval of the European Commission.

The Ministry is also preparing to review the funding distribution of the EU’s regional and structural policy programme to increase the ERDF funding for Kymenlaakso by 20 per cent, or EUR 2.2 million, between 2024 and 2027.

Supporting Kymenlaakso is part of strengthening eastern Finland’s vitality

Supporting the structural change situation in Kymenlaakso is part of the broader efforts to strengthen the vitality of eastern Finland.

“The Ministry of Economic Affairs and Employment is currently preparing a programme for eastern Finland, which will concretise the vision work carried out for the region in summer 2022. A particular focus will be on supporting regional growth and investments,” Minister Rydman says.

The strategy on industrial policy strategy, which the Government is preparing, will also have an effect on the programme work on eastern Finland. The aim is to create a stable and competitive operating environment that attracts investments.

Inquiries

Teemu Hartikainen, Special Adviser to Minister of Economic Affairs, Ministry of Economic Affairs and Employment, tel. +358 50 563 0200
Marjukka Aarnio, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 295 047 150
Mikko Härkönen, Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 295 047 889