The tunnel would be a total of 103 kilometers long. Photo: FINEST BAY DEVELOPMENT
A Memorandum of Understanding has been signed between FinEstBay Area Development Oy and Touchstone Capital Partners Ltd on €15-billion in funding for the Helsinki-Tallinn railway tunnel project. The new funding comes in addition to the €100-million, announced in late 2018, from ARJ Holding LLC.
It was agreed that one-third of the new funding will come in the form of private equity investment. The remaining two-thirds will be debt financing. The Touchstone Capital Partners’ Fund will make the minority equity investment and is committed to project debt financing.
“We are very pleased with the negotiations and the agreement reached. Touchstone has extensive experience in financing similar large private infrastructure projects” says Kustaa Valtonen of FinEstBay Area Development.
“Our goal is to also secure European, Nordic and Finnish capital investments in addition to the already agreed financing arrangement. We are looking for a sustainable and fully balanced financing solution for the project,” Valtonen added.
Starting in summer 2016, the FinEstBay Area Development tunnel project aims to construct a subsea railway between Finland and Estonia, reducing travel time between the two countries significantly, from 2 hours by ferry to 30 minutes, and creating a unified metropolitan area in the Helsinki and Tallinn regions. In 2017, Helsinki became the world's busiest passenger harbour, surpassing Dover.
The train runs in the tunnel for half an hour from Helsinki to Tallinn. Photo: Muotoilutoimisto Cairo Oy
”The Tallinn Tunnel is one of Europe’s largest infra projects and it will require close collaboration between the project consortium and the public sectors of Finland and Estonia. We are very fortunate to have very effective and transparent public actors in both nations, and we look forward to open and active partnership with all parties,” says Peter Vesterbacka, Founder of the Finest Bay Area Development Company.
Investors will also closely follow political decisions made in relation to the ambitious project. From the investors perspective, it is important that economic, environmental and safety factors are continually taken into account.
“The railway tunnel between Finland and Estonia is new and ambitious project that is great to be involved in. The tunnel creates a common metropolitan area from the Helsinki and Tallinn regions, which have a great opportunity to become a centre of gravity connecting Asia and Europe, ” says Kenny Song, chairman of Touchstone Capital Partners.
China's Touchstone Capital Partners has made several similar investments in Europe, Australia and North and South America.
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