Tideway, the new company established to construct the Thames Tideway Tunnel in London, has today priced a bond issue totalling £100m. Linked to the Retail Price Index, £50m will mature in 2048 and the remaining £50m in 2054. Listed on the London Stock Exchange, the bonds have deferred purchase dates of June 2020 and June 2021.
Tideway will be financing £3.1 billion of the project’s total £4.2 billion cost, with the remainder coming from Thames Water, the main provider of water and waste water services across London and the Thames Valley.
On 12 May 2016, Tideway agreed a £700m loan from the European Investment Bank (EIB).
Mark Corben, Tideway’s Chief Financial Officer, said: “This innovative, deferred-purchased bond issue marks Tideway’s debut on the capital markets. Combined with our loan recently agreed with the EIB, it will help secure the financing for our long-term investment programme, locked-in at 2016 rates. It is another key step forward in our work to clean up the River Thames.”
Main construction work on the Thames Tideway Tunnel is due to start later this year. It is designed to capture pollution from over 30 discharge points known as ‘combined sewer overflows’ between Acton and Greenwich. Discharges into the River Thames happen when the capital’s predominantly Victorian sewerage network becomes overloaded, sometimes after just light rainfall.
Scheduled for completion by early 2024, Tideway is aiming to reduce the construction programme by up to two years.
Tideway is the trading name of Bazalgette Tunnel Limited, established in August 2015. The company’s shareholders (Allianz, Amber Infrastructure, Dalmore Capital and DIF) collectively represent the interests of 1.7 million British pension fund holders.
In conjunction with the Lee Tunnel and Thames Water’s upgrades to the five sewage treatment works on the tidal Thames, the Thames Tideway Tunnel will address the 39 million tonnes of sewage historically discharged into the river in a typical year.
Stretching 25km through the heart of London, the main tunnel’s inner diameter will measure 7.2 metres. It will have a storage volume of 1.24 million cubic metres and run up to 66 metres underground, largely following the course of the river. Joining up with the Lee Tunnel, already in operation, it will transfer, the excess sewage to Beckton for treatment.