Touchstone and tunnel developer FinEst Bay Area Development, which is headed by businessman Peter Vesterbacka, signed a €15 billion memorandum of understanding on Thursday, the daily wrote, adding that financial details would be negotiated over the next six months.

Touchstone will maintain a minority stake in the development company, while the majority stake will remain in Finland.

One-third of the agreed-upon funding will come as private equity investment and two-thirds as debt financing. The fund is planning to use Chinese infrastructure project One Belt One Road for financing the tunnel.

A financing structure was also established with the Chinese fund that will enable other investors to join the tunnel project. The greater the holding of other investors becomes, the smaller Touchstone's stake will become, Helsingin Sanomat added.

Kustaa Valtonen, one of the founders of FinEst Bay Area, emphasised that the agreement reached "does not mean that €15 billion is deposited into our account at the beginning of next year. The money will be collected when it is needed."

According to Mr Valtonen, he is very pleased with the agreement reached.

"Touchstone has extensive experience in financing similar large private infrastructure projects," he said. "Our goal is to secure European, Nordic and Finnish capital investments as well in addition to the already agreed financing arrangement. We are looking for a sustainable and fully balanced financing solution for the project."

Political decisions related to the project in Finland and Estonia are also being closely followed by the investors. From a financing point of view, it is important that the factors related to the economy, the environment and safety are taken into account. For example, this can be guaranteed by including many alignment options in the regional plans.

Fund chair: Tallinn-Helsinki could connect Asia, Europe

"The railway tunnel between Finland and Estonia is a new and ambitious project that is great to be involved in," said Kenny Song, chairman of Touchstone Capital Partners. "The tunnel will create a common metropolitan area from the Helsinki and Tallinn regions, which have a great opportunity to become a centre of gravity connecting Asia and Europe."

Over the last 15 years, Touchstone Capital Partners as a consortium platform group has made similar investments in Europe, Australia and North and South America.

Peter Vesterbacka, the second founder of FinEst Bay Area, said in December that the tunnel is estimated to cost €15-16 billion.

Paet: We have to exercise caution

Commenting on Touchstone Capital's decision, MEP Urmas Paet (Reform/ALDE) said that great caution has to be exercised when it comes to Chinese investments in important infrastructure.

"Political interests generally come tied to an investment like this," said Mr Paet, who has also previously served as Estonia's Minister of Foreign Affairs.

According to the MEP, it has to be possible to build important European infrastructure, including between Finland and Estonia, first and foremost with European funding.

"The risks connected to using the money of Chinese state companies are too big," he said.