Finance of the Fehmarnbelt link

In February 2016, Femern A/S published an updated financial analysis.

The financial analysis calculates the repayment period for Fehmarnbelt link to be 36 years. This includes the financing of the Danish railway facilities’ upgrade and expansion from Rødby to Ringsted. The analysis includes a number of key economic parameters such as the extent of EU support, the outlook for the real interest rate and the expected revenues from traffic on the link.

The real interest rate is one of the parameters. The financial analysis used a conservative rate of 3 per cent in the calculations. Were the money to be borrowed today, it would be possible to raise loans at a significantly lower interest rate. This has a significant effect on the repayment period. A real interest rate of 3 per cent means the loans will be repaid over 36 years. Borrowing at 2 per cent lowers the repayment period by nine years to 27 years.

The outlook for revenue from road users is another important factor. The traffic revenue is based on a forecast made by the German consultancies, Intraplan and BVU. Both are experts in the transport sector, and have produced forecasts for the German Ministry of Transport among others over the past 30 years. The consultants worked independently throughout the preparation period, and this work is founded upon a high degree of professional expertise. All material and results are available for public inspection. The results are based upon the official Danish and German forecasts for, among other things, developments in the economy, population and transport habits.
Read more about Finance of the Fehmarnbelt link on their website.
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