Abstract
We compute the exact one-loop partition function of Z_N orbifolds of Euclidean BTZ black hole with the aim to compute the entanglement entropy of the black hole horizon in string theory as a function of the mass and spin of the black hole and the AdS₃ radius. We analyze the tachyonic contribution to the modular integrand for the partition function known for odd integers N>1 and show that it admits an analytic continuation resulting in a finite answer for the modular integral in the physical region 0< N ≤ 1. We discuss the flat space limit and the relevance of this computation for quantum gravity near black hole horizons and holography in relation to the thermal entropy.