We advised the European Investment Bank (EIB) in financing a project consisting of the renewal and modernisation of existing Estonian railway network, comprising modernisation of tracks, signalling and traffic control systems of Eesti Raudtee (Estonian Railway).
Modernising traffic management
The European Investment Bank has entered into a 25-year loan agreement with the Estonian state railway infrastructure company Eesti Raudtee in the sum of EUR 95 million. Eesti Raudtee will use the support to modernise most of the traffic management systems of the Estonian railway infrastructure, as well as to automate traffic management. All upgrades will be carried out on the TEN-T network, including the North Sea-Baltic corridor.
We advised EIB in the first phase of the financing by analysing the legal status of the borrower and also legal and regulatory framework in which the borrower operates. The advice included both analysis regarding the legislation in place that regulates the business of Eesti Raudtee AS in relation to holding and operating rail infrastructure in Estonia and delivery of certain services and also analysis of the terms and conditions of relevant agreements between Eesti Raudtee AS and Estonian state
Our advice included analysis of the most appropriate security structure, possibility to issue state guarantee to secure the financing and other aspects relevant in deciding the financing framework – like bankruptcy regulation and rules of insolvency applicable to Eesti Raudtee AS, terms of access to railway offered to all railway operators in Estonia and abroad, dividend policy in respect of Eesti Raudtee and possible restrictions to dividends distribution.
Collaboration between teams
The case demonstrated effective collaboration between our finance and competition and regulatory teams. The client was advised by partner Kaupo Lepasepp along with senior associates Monika Tomberg and Kaspar Endrikson.
More information (in Estonian) – here.