The European Investment Bank (EIB) has agreed to provide a €200m loan to improve Danish rail network connection to the Fehmarnbelt link, a future undersea tunnel connecting Germany and Denmark.

The agreement was signed with Femern Landanlaeg, which is responsible for managing the state’s contribution to the project. The loan amount has been guaranteed by the Danish Government.

With the funding, around 80km of railway between Ringsted and Nykøbing Falster will be modernised, along with the deployment of a second track.

Additional bridge works will be carried out on the 40km stretch between Nykøbing Falster and Rødby, equipping Danish rail network for the Fehmarnbelt link.

Furthermore, it will involve electrification works and installation of the European Railway Traffic Management System (ERTMS).

The project works, which are located on the Scandinavian Mediterranean TEN-T Core Network Corridor, are expected to facilitate train operations on the section after the tunnel becomes operational.

EU commissioner for transport Violeta Bulc said: “The Fehmarn Belt tunnel between Denmark and Germany is a key project to bring Europeans closer.

“The combination of a €123.5m grant from the Connecting Europe Facility (CEF) with the EIB’s loan will allow decisive progress on the Danish access route, mobilising an overall investment of more than €500m in the EU economy.”

The Fehmarnbelt link will be a 18km-long immersed tunnel, comprising a four lane motorway and two electrified rail tracks. Once complete, the tunnel will facilitate connectivity between Denmark and Germany.

The project, estimated to cost kr52.6bn ($7.88bn), is expected to complete in 2028.

Earlier this month, Femern, the company responsible for the project, issued a tender to appoint a railway technical consultant.