The European Investment Bank has agreed to provide a GBP700 million (US$1 billion) loan for the GBP4.2 billion (US$6 billion) Thames Tideway Tunnel. The project is urgently needed to help tackle overflows of untreated sewage into the river through the centre of the British capital.

The 35-year long-term loan from Europe’s long-term lending institution has been agreed with Tideway, the new regulated company set up to design, build, commission and maintain the 25 km tunnel, which will directly control or intercept discharges from more than 30 combined sewer overflow points, stretching from Acton in the west to Stratford in the east.

In September 2015 we published that the Pensions Infrastructure Platform (PiP) had confirmed its investment in the Thames tideway tunnel project in UK.

PiP would be involved in the project via Dalmore Capital, who helped it secure over £370 million (US$570.6 million) of investment commitments from UK pension schemes. The total project investment is estimated at £4.2 billion (US$6.48 billion).

In August 2015 we also informed that the Bazalgette consortium had received the license from OFWAT, the UK regulator for water and sewage companies, to finance the construction of the Thames tideway tunnel (TTT) project.

A total of six banks have provided senior debt to the project, including Royal Bank of Canada, Lloyds Bank, Credit Agricole, SMBC, BTMU and Santander. 

Bazalgette team is composed of International Public Partnerships Limited (INPP), Allianz, Amber Infrastructure Group, Dalmore Capital Limited, DIF and Swiss Life Asset Managers.

Jonathan Taylor, European Investment Bank Vice President said:

“The new GBP 700 million loan for Tideway represents the European Investment Bank’s largest-ever water loan and the most significant support for UK infrastructure since Crossrail. This demonstrates the EIB’s strong commitment as the largest source of financing for long-term investment in UK water infrastructure since before privatisation and builds on more than GBP 2 billion of support for investment to improve London’s water and waste water infrastructure since 1989. We are pleased to support the construction of the Thames Tideway Tunnel, a world-class engineering scheme, delivering infrastructure vital to clean up the Thames”.

Mark Corben, Tideway Chief Financial Officer, said:

“The EIB’s backing for Tideway is an important vote of confidence in us as a company, as we move into the construction phase. This loan covers a significant proportion of the financing we need to raise. The innovative, index-linked structure enables us to lock-in financing costs, whilst also matching our funding requirements and profiling debt service, in line with the expected growth in our asset base”.