RIGA - Germany Deutsche Bank has signed a major loan agreement with Riga City Council and Dienvidu Tilts (Southern Bridge) on funding the construction of a new bridge over the Daugava River in the Latvian capital.
Deutsche Bank, the sole applicant for the loan tender, agreed to lend 82.2 million lats (117 million euros) for the first phase of the bridge's construction. The loan will have a 6.28 percent interest rate and be issued directly to Southern Bridge, a company that was founded specifically for erecting the much-needed bridge, so that the city will not incur any additional debt.
Under the agreement, the City Council will start paying the money to Southern Bridge in 2010, when the first phase of the project is completed. The city is planning to repay the loan by 2025.
The Riga City Council has authorized the finance department's assessment commission to conclude the agreement with Deutsche Bank, thus saving time on various lengthy procedures and speed up the construction work.
The first phase of construction, worth 82.24 million lats, began last November and should be completed by 2007. The estimated cost of all three phases of the project is 170 million lats.
Currently, there are three automobile bridges spanning the Daugava River, but due to constant congestion, a new bridge is being developed.