Reform quiz prime minister on Porto Franco KredEx loan

The under-construction Porto Franco development.
The under-construction Porto Franco development. Source: Anna Aurelia Minev/ERR

Reform Party MPs have asked Prime Minister Jüri Ratas (Center) for an explanation of how the developers of a 150,000-square meter plot near Tallinn harbor qualify for loans provided by state agency KredEx, whose loans have been utilized by many companies hit by the coronavirus pandemic.

"We have serious doubts that at least some of the government's financial aid decisions do not meet the conditions set out in the explanatory memorandum to the draft supplementary budget for 2020, nor is it possible to see a unified line in government decisions," said Kaja Kallas, Reform leader, in the written question.

Other company loans have also been subject to scrutiny by Reform.

The government gave the go ahead for a €39.4 million, 12-month loan to developers Porto Franco last week.

Kaja Kallas and Reform MP Andres Sutt, a member of the Riigikogu's finance committee, are requesting an overview from companies on how the recipients of financial assistance meet the conditions for using the KredEx strategic enterprise support measure, and whether they did not have alternative financing options.

Reform are also asking what the characteristics of a strategic company which could qualify as a beneficiary of KredEx's aid measures by a government decision might be, along with how equal treatment of entrepreneurs is ensured, how many applications were received for KredEx's strategic business measures, and on what basis the beneficiary companies were selected.

Reform also wants the prime minister to explain how the KredEx loan process does not distort competition.

Other real estate developers have hit out at the load.

"Private real estate development - offices, hotels, shopping malls - is not something that should be supported by the government. Even in the context of a loan. This is a very selective decision," Eften Capital boss Viljar Arakas told ETV news show "Aktuaalne kaamera" Tuesday night.

The Porto Franco development already had a €102-million loan deal agreed in February, on the eve of the coronavirus reaching Estonia, with Estonian bank Luminor.

The large-scale development is to encompass residential and business space, using high-tech environmental protection and paying attention to energy consumption requirements.

The prime minister has ten working days to answer the written question.

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Editor: Andrew Whyte

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