Finest Bay Area Development Oy has signed a Memorandum of Understanding with Chinese Touchstone Capital Partners Ltd on the financing of the Tallinn Tunnel, covering EUR 15 billion in funding. Funding comes in addition to the previously announced EUR 100 million funding agreed with ARJ Holding LLC in late 2018, the company announced in a press release.
One-third of the funding now agreed will come as private equity investment and two-thirds as debt financing. The Touchstone Capital Partners’ Fund will make the minority equity investment and is committed to project debt financing.
China's Touchstone Capital Partners as consortium platform group has made similar investments in Europe, Australia and North and South America.
“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 Finest Bay Area Development.
Financing is available to Finest Bay Area Development as the project progresses. Financial details will be negotiated over the next six months.
“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” says Valtonen.
The purpose of the Finest Bay Area Development tunnel project is to construct a subsea railway tunnel between Finland and Estonia, which will significantly reduce travel time between countries. The railway tunnel creates a unified metropolitan area in the capital regions of Finland and Estonia.
” 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.
Political decisions related to the project in Finland and Estonia are also followed closely by the investors. From the financing point of view, it is important that the factors related to the economy, the environment and safety are taken into account. For example this can be guaranteed by including many alignment options in the regional plans.
“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 center of gravity connecting Asia and Europe, ” says Kenny Song, chairman of Touchstone Capital Partners.