Finland and Estonia have agreed to study the possibility to develop the FinEst Link project, an undersea rail tunnel link to connect Helsinki and Tallinn.

The governments of both countries have signed a memorandum of understanding (MoU) to explore the options to carry out the project and the socioeconomic impact of the tunnel in the region.

The new tunnel would also connect Helsinki to Rail Baltica, a new standard-gauge line that links Tallinn, Riga, Kaunas, Warsaw and Berlin. It would form part of the North Sea-Baltic Corridor, which connects the ports of the Eastern shore of the Baltic Sea with the ports of the North Sea.

The total project investment is estimated at €13 billion (US$14.17 billion).

The time to travel between Helsinki and Tallinn is approximately 90 minutes by fast ferry. The FinEst Link project would reduce the time to travel between the cities to 30 minutes.

According to a pre-feasibility study published last year, the Helsinki-Uusimaa Regional Council and the Harju County government suggested that the development of the tunnel project would be economically viable.

Helsinki officials released in a statement:

"Helsinki and Tallinn together form an economic area of approximately 1.5 million people. To fully utilise the area's potential, transport between the cities should be faster and flow easier than at present."