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Sunday 1 March 2009
From the web site of the NEW CIVIL ENGINEER:
Major projects seek EIB aid
Published: 26 February 2009 14:56 Author: Ed Owen More by this AuthorLast Updated: 26 February 2009 16:26Reader Responses
Crossrail - is seeking £1bn from the EIB to go towards Crossrail
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London 2012, Crossrail and Europe's largest waste contract were this week all chasing European Investment Bank (EIB) loans to make up shortfalls in private lending resulting from the credit crunch.
Transport for London (TfL) is the latest body to seek EIB help. It has submitted a request for £1bn, as part its £2.4bn borrowing plans to fund Crossrail over the next decade.
Developers and the Olympic Delivery Authority (ODA) are also seeking EIB loans to help with the conversion of the Olympic Village into housing after 2012.
And it is thought the bank is about to increase its £750M investment in the Manchester waste PFI deal so it can reach financial close.
The EIB has recently plugged a funding gap on the £380M M80 PFI deal, helping to push the project to financial close and allowing construction work to start on site.
TfL needs to raise £1bn in 2008/9 to 2009/10 and the remainder between 2013/14 and 2016/17. TfL has pledged a total of £7.7bn to Crossrail's £16bn cost.
"We have held initial discussions with the EIB about obtaining funding which would be used to part-fund TfL's Crossrail funding commitments," said a TfL spokesman.
"We anticipate that we will hold further discussions with the EIB during the coming months."
The ODA and the consortium which will build the Olympic Village are seeking £255M from the EIB for the conversion of athletes' accommodation into housing – half the projected conversion cost.
Private funding for the Olympic Village scheme has stalled, and the ODA is in talks to revive the investment plan.
Three thousand homes are under construction on the Stratford site.
These will house athletes for the two months of the Olympic and Paralympic Games in 2012. In legacy mode, the flats will be converted into homes, 1,380 of which will be affordable housing.
Costs to convert the Olympic Village flats to conventional housing post-2012 are covered in the total £9.3bn Olympic Games budget. But "for the affordable housing portion, money would always be coming from the Department for Culture Media and Sport and bank debt," said an ODA spokesman.
The ODA and a joint venture between social landlords East Thames Group, Southern Housing Group and developer First Base have submitted an application to the EIB for half of £510M they say it will cost to retrofit the flats and install ancillary infrastructure – an average of £370,000 per flat.
"Discussions on the affordable housing elements of the Olympic Village are ongoing and making good progress, but a funding deal has not been agreed as yet," said the ODA spokesman.
The EIB is also thought to be about to step in to rescue the £3bn Manchester waste PFI scheme.
The bank has committed itself to providing up to half of the £750M the John Laing/Viridor joint venture needs for the project to reach financial close. It is thought it may increase this. An EIB spokesman said:
"We are working hard with the promoters and other funders to close this transaction as soon as possible."
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