Sõõrumaa denied €40 million Patarei project KredEx loan ({{contentCtrl.commentsTotal}})

Urmas Sõõrumaa
Urmas Sõõrumaa Source: Siim Lõvi /ERR

State credit agency KredEx has rejected businessman Urmas Sõõrumaa's application for a €40 million loan towards the development of the Patarei sea fortress in Tallinn.

Sõõrumaa, who is also head of the Estonian olympic committee, said that he recently received a negative response from KredEx, having applied for the €40-million loan some months ago, on the grounds that it is not yet in progress.

Since his contract for the site – Patarei is  an abandoned prison complex dating from the Tsarist era - is with the state, the latter can withdraw from the €4.6-million agreement for selling the land to Sõõrumaa, he told told ERR.

Sõõrumaa noted that a similar sum to what he requested had been granted to the Porto Franco project developers, which is still being completed.

"Indeed, this particular measure is such that it can only be used to build Porto Franco. There is nothing else that can be built from it. Figuratively speaking, you must have a crane at the ready, a building permit in progress and at least 10,000 square meters of office space. There is no other such construction project at the moment," Sõõrumaa said.

KredEx has granted loans to businesses of all sizes hit by the coronavirus pandemic, most notably €100 million to shipping line and hotels operator Tallink, €37 to the Alexela-owned oil products provider Kiviõli Keemiatööstus, and €10 million to aircraft maintenance firm Magnetic MRO.

In total, KredEx has lent around €400 million to a little under 300 businesses since the pandemic began.

The Porto Franco loan hit controversy since, while it is work in progress, it is not generating revenue yet. The prime minister said the planned residential/retail/business development in Tallinn's ferry harbor area will generate revenue once it is finished.

n 1828, Tsar Nicholas I of Russia endorsed a defense plan of Tallinn in accordance with which a coastal defense battery was to be built at the location of former coastal defense structures had stood during Swedish rule. Construction of Patarei's main building began in 1829 and was completed in 1840.

Patarei was used as a Russian army barracks beginning in 1867 and converted into a prison in 1919, a capacity in which it served under various governments and regimes until 2002.

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Editor: Andrew Whyte

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