A loan agreement between the European Bank for Reconstruction and Development (EBRD) and Estonian bank Luminor was signed on Friday totalling €102 million, aimed at the proposed Porto Franco large-scale development in Tallinn's city harbor district.
The EBRD's component comes to €63 million, and Luminor's €39 million, a Porto Franco press release said. The loans provide over half the projected cost of the project, which should come in at €190 million, Porto Franco says.
Minister of Foreign Trade and Information Technology, Kaimar Karu noted of the deal that: "Developments that help shape modern environments, which facilitate entrepreneurship and tourism are certainly worthy or acknowledgment and praise."
"The volume of the investment from EBRD and Luminor is also significant. This will not only build the centre, but will also contribute to the competitiveness of the Estonian economy and support environment-friendly and sustainable development of the country," Karu continued, according to a Porto Franco press release.
Porto Franco board chair Rauno Teder added that: "Signing a funding contract is an extremely significant milestone for any property development project."
Teder noted that this was the first property development loan in both Estonia and the Baltic States as a whole, to have broken the €100 million mark.
The Porto Franco project is to be built in an environment-friendly manner, the company says, and will comply with high environmental protection and energy consumption requirements.
The project involves using various state-of-the-art technologies to ensure efficient use of energy and water and the reduction of waste generation and pollution, including climate change-resistant technologies which will alleviate the climate risks endangering the region, Porto Franco said.
EBRD Head of Property and Tourism Vlaho Kojakovic said that: "Connecting the historical center of Tallinn with Old City Harbor, Porto Franco will play a pivotal role in the regeneration of the wider port district, ast becoming the main gateway to the city."
The EBRD's head of the Baltics Ian Brown noted that the development was: "...just one step in support of the strategic regeneration of this historic and innovative city," adding that it was an example of the organization's focus on green economic development in Estonia.
150,000 square-meter development
Architecture firm Chapman Taylor of London, and local architects Ott Kadarik and Mihkel Tüür provided architectural services, with the main designer being Estkonsult OÜ.
The building was designed and is to be constructed based on the LEED Gold standards, Porto Franco says.
The Porto Franco development is to receive €190 million in investments, and will cover an area over 150,000 square meters (see gallery). It will have a three-level underground parking facility with 1,170 parking spaces and five levels above the ground to host a shopping centre, an office centre, and a hotel.
The EBRD is a multilateral bank, founded in 1991, which promotes the development of the private sector and entrepreneurial initiative in 38 economies across three continents. It is co-owned by just under 70 countries as well as the EU and the European Investment Bank (EIB), the EU's lending arm.
To date the EBRD has invested over €700 million into 90 different projects in Estonia, according to the press release.
Luminor is the third-largest provider of financial services in the Baltics, with a reported approximately 1 million clients, 2,500 employees, and market share of 16.6 percent in deposits and 18.7 percent in lending as at the end of the Q4 2019.
Editor: Andrew Whyte