London’s Crossrail scheme, one of the largest transport infrastructure projects being developed in the world, has secured financial backing for a significant portion of its cost.
The European Investment Bank (EIB) has committed to lend £1 billion (€1.14 billion; $1.65 billion) to the project, which will be used to finance part of Transport for London’s (TfL) contribution to Crossrail. TfL, in conjunction with the Greater London Authority, is responsible for £7.7 billion of Crossrail’s total funding. The total value of the project is around £16 billion.
The £1 billion loan facility will subsequently be drawn down over the next six years.
Mayor of London Boris Johnson welcomed the financing agreement, saying that it is one of the largest loans ever secured for a transport project. “Our good friends at the EIB have provided us with a billion more reasons to proceed with the unstoppable force that is Crossrail,” said Johnson.
The EIB already has two existing loan agreements with TfL, including £450 million backing the East London rail Line extension and £200 million behind the Docklands Light Railway.
Furthermore, companies set to benefit from the new line are required to stump up part of the cost, with Canary Wharf Group contributing £150 million to a new Isle of Dogs station and debt-burdened airport operator BAA putting in £230 million. The Corporation of London is seeking a further £150 million of funding from business.
US engineering giant Bechtel was awarded the lion’s share of the infrastructure development work in April when it won the project delivery partner contract following a six-month competitive bidding process. The main construction work, comprising the development of 118km of rail line across the Greater London area, is not set to begin until 2011, with operations due to commence in 2017.