The European Investment Bank (EIB) has agreed to back the £4.2 billion Thames Tideway Tunnel project in London.

The bank will provide a £700 million loan for the scheme, which aims to tackle overflows of untreated sewage through the centre of the city into the River Thames.

The 35-year loan has been agreed with Tideway, the company set up to design, build, commission and maintain the 25km 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.

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Jonathan Taylor, EIB's 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.

"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 CFO, added: "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."

(LM/MH)