EIB lends £700m for Thames Tideway Tunnel

The 35-year loan, which the bank says is the largest-ever for a water project, represents a sizeable portion of the financing needed to build the £4.2bn scheme.

The European Investment Bank has agreed to inject £700 million ($1.0 billion; €895 million) into the Thames Tideway Tunnel (TTT), which is billed as the largest infrastructure project ever undertaken by the UK water industry.

The 35-year loan comes nine months after the financing package put forward by the consortium chosen to build London’s £4.2 billion “super-sewer” received the green light from Ofwat, the country’s water regulator.

Shareholders in Tideway, the regulated company set up to build and commission the tunnel, comprise Germany’s Allianz; UK-listed International Public Partnerships (INPP), through its adviser Amber Infrastructure Group; London-based Dalmore Capital; and Dutch-headquartered DIF.

“The new £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,” said Jonathan Taylor, vice president of the EIB, in a statement.

The 25km tunnel will control or intercept discharges from more than 30 combined sewer overflow points, stretching from Acton in western London to Stratford in the east.

How much each equity investor is contributing to TTT has not been disclosed but INPP said it was investing £210 million in the project, equivalent to a 15.99 percent stake, implying an overall equity cheque of about £1.3 billion. The Pensions Infrastructure Platform, a co-investor alongside Dalmore, also said it was providing £370 million to the project.

Ofwat has set a regulatory baseline of £3.1 billion for Tideway, with the balance being funded by Thames Water, the capital’s main water utility.