Finest Bay Area Development has signed a memorandum of understanding (MoU) with Touchstone Capital Partners on the €15bn funding of the Tallinn Tunnel, a proposed rail undersea tunnel that would span the Gulf of Finland and connect the capital cities of Finland and Estonia.
This is in addition to the previously announced €100m funding agreed with ARJ Holding in late 2018.
One-third of the funding will come in the form of private equity investment and two-thirds as debt financing.
The Touchstone Capital Partners’ Fund will make the minority equity investment under a commitment to project debt financing.
Finest Bay Area Development’s Kustaa Valtonen said: “We are very pleased with the negotiations and the agreement reached.
“Touchstone has extensive experience in financing similar large private infrastructure projects.”
Financing will be available to Finest Bay Area Development as the project progresses and financial details will be negotiated over the next six months.
Valtonen said: “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.”
Under the Finest Bay Area Development tunnel project, a subsea railway tunnel will be connected between Finland and Estonia, which will reduce travel time between the two countries and create a unified metropolitan area in the capital regions of Finland and Estonia.
Finest Bay Area Development founder Peter Vesterbacka said: “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.”
As consortium platform group, Touchstone Capital Partners of China has made similar investments in Europe, Australia and North and South America.
Touchstone Capital Partners chairman Kenny Song said: “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.”
Image: Finest Bay Area Tunnel. Photo: Courtesy of Finest Bay Area Development Oy.