Finest Bay Area Development (FEBAY), the company behind the proposed Helsinki–Tallinn railway tunnel, has submitted a new application to the Estonian government to initiate the project’s national spatial planning process and associated strategic environmental assessment. The move marks a renewed effort to advance the cross-border infrastructure project after years of regulatory and procedural delays.
Submitted on 2 November 2026, the application seeks to launch Estonia’s National Designated Spatial Plan (NDSP), the statutory framework for examining the tunnel’s proposed route, spatial requirements and environmental impacts. The process will involve relevant authorities, local communities and other stakeholders.
The submission follows changes to Estonia’s planning and environmental assessment framework, which FEBAY believes could provide a more predictable basis for evaluating major infrastructure projects. The company also expects the process to support closer coordination with Finland, where the project’s environmental impact assessment is already underway.
The need for coordinated assessments has previously been highlighted by the joint Finnish–Estonian Ad Hoc Working Group, which has called for the tunnel’s overall and cross-border environmental effects to be examined through synchronized national procedures. The two countries signed a Memorandum of Understanding on cooperation over the railway tunnel in April 2021.
Estonia’s planning reforms open a new path
FEBAY’s previous attempts to move the project forward in Estonia encountered legal and procedural obstacles, including court proceedings concerning the relationship between environmental assessments and national spatial planning.
A 2024 study commissioned by the Estonian government found significant differences in the duration of environmental assessment procedures across the region. According to the study, processes that could take approximately one year in Finland and Sweden might require at least six years in Estonia.
Estonia has since pursued reforms intended to reduce administrative delays and duplicated procedures while maintaining environmental safeguards and public participation.
FEBAY CEO Peter Vesterbacka said the new application represents progress after several years of uncertainty, adding that the company welcomes Estonia’s efforts to establish clearer procedures and more transparent decision-making for major investments.
“We have had to wait years to take this step, and we are pleased to be moving forward,” said Peter Vesterbacka. “Estonia has recognized the importance of clear, efficient procedures with predictable schedules and transparent decision-making for major investments. We are confident in the direction the country is taking and look forward to working constructively with the government, experts and communities.”
Kustaa Valtonen also emphasized the importance of having a predictable regulatory process through which the project’s environmental, technical and economic considerations can be properly assessed.
“Predictability matters when developing infrastructure of this scale,” said Kustaa Valtonen. “We need a process that allows the environmental, technical and economic questions to be examined properly, with clear responsibilities and a workable timetable. The changes in Estonia provide a stronger basis for moving forward.”
FEBAY said its preparations have included discussions with Estonia’s Minister of Economic Affairs and Industry Liina Vahtras and Foreign Minister Margus Tsahkna. Legal advice throughout the process has been provided by Sorainen, with partner Paul Künnap supporting the preparation of the renewed application.
New financing initiative targets European investors
Alongside the planning process, FEBAY is working to strengthen the project’s financing structure through a recently announced partnership with Finna to establish the Finna Finest Infrastructure Fund.
The initiative aims to attract European private capital, with an initial focus on family offices interested in long-term infrastructure investments. FEBAY sees these investors as a potential source of funding for the tunnel’s development.
Deloitte Private’s 2024 research estimated that Europe had approximately 2,020 single-family offices, while the global family office sector managed around US$3.1 trillion in assets.
The proposed fund is intended to connect some of this long-term investment capital with the Finest Tunnel project as it progresses through the necessary planning and assessment stages.
Connecting Helsinki and Tallinn to Europe’s rail network
The Finest Tunnel is a privately developed railway project intended to connect Helsinki and Tallinn through a passenger and freight rail link beneath the Gulf of Finland. The proposed connection would link Finland with Rail Baltica and, consequently, the wider European railway network.
The project aims to improve cross-border mobility, create new opportunities for businesses on both sides of the Gulf of Finland and support more sustainable transport and regional supply security.
“Submitting the application is an important step in our long-term commitment to delivering the Finest Tunnel,” said Valtonen. “We are ready to contribute the studies, expertise and resources needed to support a rigorous assessment and an informed decision.”
However, the submission of the Estonian application marks the beginning of another statutory planning and assessment stage rather than approval to construct the tunnel. Its progress will depend on the outcome of the relevant planning, environmental and regulatory procedures in both countries.
“European family offices are an important potential investor group for the Finest Tunnel,” said Valtonen. “We see an opportunity to bring together long-term private capital and a project that can create lasting commercial and economic value for Northern Europe. Our partnership with Finna provides a channel for developing those investor relationships as the project advances.”
Beyond the Finest Tunnel, FEBAY is also developing the proposed Oslo–Stockholm 90-minute railway.
Source: Finest Bay Area Development (FEBAY), 3 November 2026.
Read the orginal article: https://arcticstartup.com/finest-bay-area-development-submits-a-new-application-to-the-estonian-government/
