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 FINANCIAL ANALYSIS ESTIMATES A REPAYMENT PERIOD FOR THE FEHMARNBELT LINK OF 36 YEARS, INCLUDING THE NEW DANISH RAIL FACILITY FROM RINGSTED TO RØDBY
Did you know that...
... the financial analysis calculations assumed a real interest rate of 3 per cent.
... the average real interest rate has been 2 per cent and 1.8 per cent respectively over the last 10 years for Storebælt and Øresund?
... a real interest rate of 2 per cent instead of 3 per cent means that the repayment period is reduced by 9 years?
The consulting firm, Tetra Plan, has also produced forecasts for traffic across the Fehmarnbelt using the EU Commission's transport model Trans-Tools. Researchers from Copenhagen Business School have also prepared research-based documentation for economic growth assumptions.
The COWI consultancy has conducted an external quality assurance of the traffic forecast conclusions. The assurance concluded that the forecast gives a realistic estimate of road traffic on the Fehmarnbelt link. Read the report on the Transport Ministry website here.