Government approves €39 million loan to Porto Franco development ({{contentCtrl.commentsTotal}})

Porto Franco
Porto Franco Source: ERR

On Thursday, the government approved a working capital loan of €39.4 million to the development of Porto Franco. The loan will be managed by KredEx.

The total amount borrowed is €39.4 million and is set for the next six years with an interest of 12-month Euribor plus 2 percent per annum, the contract fee is 0.2 percent of the loan limit amount.

The loan limit can be used in installments - the minimum size of each installment is at least €5 million and the maximum size €15 million.

The loan is secured by assets located in Tallinn at Laeva T6, Laeva 1, Kuunari 1 and Kai 4.

Porto Franco signed a €102 million loan agreement with the European Bank of Reconstruction and Development (EBRD) and Luminor Bank a few weeks before the government imposed the emergency situation in the state due to the spread of COVID-19. 

The EBRD's share in the loan is €63 million and Luminor's share is €39 million. 

Porto Franco announced in early July the EBRD had made additional demands to mitigate the risks of the economic downfall. 

The EBRD wants Porto Franco's shareholders to contribute more money than previously agreed in the early stages of construction work. In addition to that, they want to set up a guarantee account with €10 million to service bank payments in 2022. 

The Porto Franco development has an area of over 150,000 square meters in the business district by the Port of Tallinn. The total cost of the development was estimated at €190 million at the end of February. 

 

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Editor: Kristjan Kallaste

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