24 Apr 2019
Legal & General's investment - Thames Tideway Tunnel - Completes major construction milestone
LGIM Real Assets (Legal & General), on behalf of its clients including Legal & General Retirement Institutional (LGRI), provided £225 million in long-term financing over the past three years to support the construction of the Thames Tideway Tunnel (“the tunnel”) – London’s new super sewer. The company building London’s 25 km long tunnel has confirmed that it has completed 40 per cent of construction and is on track to deliver the project on time in 2024.
The Thames Tideway Tunnel is core strategic UK infrastructure, and will form an integral part of future proofing London’s Victorian sewer system and will stretch from Acton in the West to Abbey Mills in the east and will have a diameter of c.7.2m and a depth ranging between 30m to 66m underground. The Thames Tideway Tunnel will extend the existing sewer, stopping millions of tonnes of sewage from polluting the Thames. World class construction contractors are delivering infrastructure that – once built – will require limited operational and maintenance during the 120 year design life.
This construction update, as announced by Tideway, marks five years since the project was given the green light and completion of the first and most unpredictable phase of the project. The Tideway workforce, which stands at 2,000, have achieved complex engineering feats in the initial phase of the project including the completion of seven new pieces of land in the Thames, including at Chelsea, Blackfriars and Putney, and digging five giant shafts up to 50m below London’s street level. Construction is taking place at 23 sites across the city and Tideway is using the river instead of roads as far as possible to build the project, cutting the impact on road congestion and air quality.
Legal & General’s infrastructure business has seen considerable growth in the last 12 months, with the infrastructure debt team investing over £1.5 billion into all key social and economic infrastructure sectors across the UK, Europe, Australia and the USA.
Annuity money is ideally suited for investments in infrastructure, as it can be invested for 20, 30 or 40 years – matching our extended liabilities and delivering on both real economic growth and social value for the UK.
Tom Sumpster, Head of Infrastructure, LGIM Real Assets
Our £225 million commitment to Tideway demonstrates the value in large scale long term funding to develop UK infrastructure. The long dated nature of the cashflows and the inflation linkages make these attractive investments to support pension payments - enabling us to link annuity investment with infrastructure development, improving the built environment around the UK and the lives of our customers.
Eleanor Bucks, Managing Director, Direct Investments and Real Assets, Legal & General Retirement