World’s Longest Undersea Rail Tunnel Gets $17 Billion in Funding
The developers of the world’s longest undersea railway tunnel, have reached an agreement on $17 billion in funding for project.
(Bloomberg) -- The developers of the world’s longest undersea railway tunnel, which once completed will connect the Finnish and Estonian capitals, have reached an agreement on 15 billion euros ($17 billion) in funding for the project.
The financing, which will be provided by China’s Touchstone Capital Partners Ltd., will cover the entire cost of the project, the tunnel company Finest Bay Area Development Oy said in a statement on Friday. A third of the funding will be made in the form of a private equity investment, giving Touchstone a minority stake, and two thirds are debt financing, according to the memorandum of understanding.
The planned tunnel between Helsinki and Tallinn will span more than 100 kilometers (62 miles) and entails the construction of at least one artificial island. The project was founded by Finnish entrepreneur Peter Vesterbacka, formerly of Rovio Entertainment Oyj.
The governments of Finland and Estonia have said they will work toward securing European Union funding for the tunnel, which could reduce the amount of private funding needed. Touchstone’s financing is available to Finest Bay Area Development in tranches as the project progresses, with financial details of the contract set to be negotiated over the next six months.
It’s not clear from the press release whether Touchstone has raised the money or committed to doing so.
To contact the reporter on this story: Kati Pohjanpalo in Helsinki at kpohjanpalo@bloomberg.net
To contact the editors responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net, Niklas Magnusson, Ott Ummelas
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