bne IntelliNews – EBRD says loan to controversial Porto Franco project in Estonia was never disbursed

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The European Bank for Reconstruction and Development (EBRD) said on January 13 that it was no longer linked to the Porto Franco real estate project, which this week was at the center of a corruption case that brought down the Estonian government. The EBRD said the € 63 million loan was never disbursed and the deal had already expired in 2020.

As reported by bne intellinews, Estonian Prime Minister Juri Ratas has resigned on January 13, following the Attorney General’s decision to investigate a real estate scandal in Tallinn.

As reported by Bne Intellinews, the Attorney General of Estonia announced on January 12, he investigated corruption allegations against two of the top officials of the ruling parties over government loans granted to the controversial Porto Franco real estate development project in Tallinn in exchange for party donations.

“The EBRD would like to officially declare that our loan for the Porto Franco project has never been disbursed and the agreement has now expired. Therefore, the EBRD is no longer involved in the project,” said Axel Reiserer , press officer at the EBRD.

Reiserer clarified that the EBRD did not abandon the loan due to the recently emerged corruption case, but that the contract had already expired at the end of the third quarter of 2020.

With a loan agreement signed on February 28 last year, the EBRD was expected to provide up to € 63 million and Luminor up to € 39 million for the integrated retail, office and Porto Franco hotel in Tallinn, which is a key part of the larger renovation. from the port district.

Last summer, the government decided to support the Porto Franco project from the Kredex measure with a working capital loan of € 39.4 million. The loan was granted for a maximum term of six years, with an interest rate of 12 months Euribor plus 2% per annum.

The total cost of developing Porto Franco is around 200 million euros.

After Ratas resigned, President Kersti Kaljulaid immediately called on opposition Reform Party leader Kaja Kallas to try to form a government, ending the country’s turbulent and controversial left-right populist coalition after less two years in power.


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