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The state guarantee model

As with the links across Storebælt and Øresund, the Fehmarnbelt link will use the so-called state guarantee model. The model ensures low financing costs, and makes it possible to fund major projects at no cost to the taxpayer.

The users of the fixed link will pay for the Fehmarnbelt link, not taxpayers. The construction is financed by loans raised on the international financial markets that are underwritten by the Danish state. Denmark's high credit rating means that the loans can be taken out at very low interest rates. 

The loans will be paid back over time with the revenue from the users of the link. The revenue will also cover the cost of operation and maintenance of the finished tunnel, as well the cost of construction and operation of the railway from Rødbyhavn to Ringsted. 

You can read more about the state guarantee model in this publication.

Less exposure to fluctuations

If assumptions on traffic levels or the interest rate conditions change during the project, there is no need for extra money from the state treasury. For example, changes in the volume of traffic simply mean that the repayment period would be slightly longer or shorter. Financial sensitivity calculations were developed and are included in the financial analysis.

With the state guarantee model it is possible to undertake large-scale and long-term projects with sound economics that would otherwise be difficult to realise under the state budget. The Fehmarnbelt link therefore takes no money from other projects or sectors. The funding model is approved by the European Commission.

THE DANISH STATE’S HIGH CREDIT RATING ENSURES THAT FEMERN A/S CAN RAISE LOANS ON THE FINANCIAL MARKETS AT LOW INTEREST RATES.