Thames Tideway Tunnel Project

The challenge…
for London and its population

While still in good condition, London's Victorian sewers no longer have the capacity to meet the demands of London today. Designed and engineered by Sir Joseph Bazalgette in the 1850s, and built between 1859 and 1865 for four million people, the conditions under which London's sewage system operate have changed vastly: rising water consumption per capita, diminished green space to soak up rainfall, and a growing population that today numbers nearly nine million inhabitants. As a result, overflows are frequent, resulting in tens of millions of tons of untreated sewage flowing into the River Thames.

The solution...

To solve this environmental problem, a major new sewer is being built: the Thames Tideway Tunnel. Aimed at improving London's environment, appearance and public health, the Thames Tideway Tunnel is a ‘super sewer’ with a diameter of 7.2m that will run for 25km, mainly beneath the river Thames, at a depth of 30-65m, intercepting sewage overflows and cleaning up the river. In fact, when the Thames Tideway Tunnel and associated sewerage network upgrades are in operation it is estimated that the pollution of the Thames will be reduced by 94%.

This expansion of London’s sewer network is due for completion in 2024, with work taking place across 24 construction sites in London. These go from Acton in West London to Beckton in the East, and many are located at the river’s edge, right in the centre of the city. Such is the status of the project that one of the construction sites even received a visit from a member of the Royal Family.

But more than status, the Tideway project will bring thousands of jobs, a rejuvenated river economy and completely new areas of public space with the creation of new parks along the Thames.

Sustainable and innovative methods

The Thames Tideway Tunnel is being built by world-class contractors, using sustainable, innovative and cost-effective methods of construction. The project is split into three distinct sections, with three main ‘drive sites’ – locations from which four tunnel boring machines (TBMs) will burrow under London to construct the main tunnel.

These giant, state-of-the-art machines, each custom-designed to be as safe as possible, tunnel through the ground using a rotating cutter head, simultaneously creating the tunnel walls with prefabricated segments of concrete. In addition to the physical challenges involved, their task is made harder by London’s rich archaeological history: in December 2018 during the excavations for the tunnel a 500-year old corpse was discovered, which turned into an archaeological sensation.

Project finance

The tunnel will cost £3.8bn to complete, and an additional £1.1bn has already been spent by Thames Water for preparatory works. The project is being funded directly by Thames Water, the UK's largest water and wastewater services company, with the balance privately financed..

To help meet the project’s financing needs, Tideway initiated a £200 million private bond placement, in addition to the issuance of the company’s first UK public Green Bond. Combined, the two transactions have a value of £450 million.

Allianz is invested in the project via the newly created company Bazalgette Tunnel Limited, trading as Tideway, as part of a consortium with other infrastructure investors, with a stake of 34%.

The company

Tideway is the largest issuer of green bonds in sterling and holds the joint-highest Green Evaluation score awarded to date by S&P globally. Tideway is considered to be one of the best companies to work for in the UK. It has recently been recognised as one of The Times Top 50 Employers for Women and as a Health and Disability Confident Committed Employer.

Tideway workers are given five days per year to participate in volunteering activities. In addition, the company works with a range of charities, partners, schools and community groups on everything from mentoring to foreshore cleanups.

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Infrastructure equity investments are highly illiquid and designed for long term professional investors only.

Sources:
https://www.tideway.london ; https://www.tideway.london/media/1541/tideway_press-pack_vis3.pdf ; https://www.linkedin.com/company/tideway-london/life
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