The European Investment Bank (EIB), the European Union's long-term financing institution, is lending GBP 100 million (EUR 145m) for the extension of Docklands Light Railway. This project will provide a new transport link across the River Thames, connecting North Woolwich to Woolwich Arsenal in South London.
This operation forms part of London's Transport Strategy and is expected to contribute to the regeneration of the Thames Gateway area thus promoting regional development. The River Thames in this area has long been recognized as a significant barrier to opportunities for the deprived communities on both sides, and the scheme is seen as increasing access for these communities as well as contributing to the attractiveness of proposed development sites at Royal Docks and around Woolwich town centre. As a public transport scheme, the project will also increase the attractiveness of the public transport network, improving the co-ordination, reliability and integration of the system, in addition to providing additional opportunities for interchange with other modes of public transport.
The project will take the form of a Public Private Partnership (PPP). EIB funds will be lent directly to the private concessionaire, Woolwich Arsenal Rail Enterprises Limited (WARE), a special purpose vehicle owned by AMEC Investments Limited and Royal Bank Project Investments Limited. WARE will design, construct, maintain and make available the DLR extension under a 30-year concession, granted by The Docklands Light Railway Limited (DLRL), which is ultimately owned by Transport for London. The provision of passenger services and rolling stock will remain the responsibility of the DLRL.
The project will be financed from the combination of a commercial bank facility (provided by a syndicate led by Royal Bank of Scotland plc) and the loan provided by European Investment Bank, together with junior subordinated loan stock and ordinary shares. The loan was signed in London by VP Sedgwick who stated, "The EIB is delighted to further our cooperation with DLRL with this project which we consider to be of the utmost importance in terms of the social and economic benefits it will bring to the Woolwich area. The loan confirms the EIB's commitment to the promotion of regional development within the expanded EU. The UK remains a European leader in PPP ventures, and this operation is a prime example of how the public and private sectors can work together for the good of the extended community".
The EIB has co-funded several major infrastructure PPP projects in the UK in the past, in London notably the modernization of the London Underground (GBP 130m and 900m in 1998 and 2000 respectively). Facilitating the involvement of the private sector in the provision and financing of public infrastructure remains a priority for the EIB across the expanded EU.