The 15-year loan was made by the European Investment Bank, the EC's financing arm, using a lending facility agreed at last year's Edinburgh summit. It will form a key part of the pounds 400m contribution by the private sector to London Transport for the extension of the Underground line from Green Park in central London to Stratford in east London.
This is one of the most important transport projects in Britain, not least because of its political significance. The collapse of the project had cast doubts over the urban renewal strategy of the Government.
It does not signal the final go-ahead for the project - the approval of the banks and the administrators of Olympia and York Development, which masterminded the Canary Wharf project, must first be sought. But last night London Transport said it was 'delighted' and that the money was 'a big step forward'.
The question of transport to Canary Wharf became critical to its success or failure, but Olympia and York, owned by the Canadian Reichmann brothers, was unable to find the cash.
The project is now being financed by an international syndicate led by Lloyds Bank in association with the EIB. The president of the EC's house bank is Sir Brian Unwin, the former head of Customs and Excise, who arrived at the Luxembourg-based institution only days ago. Last night, he said: 'The Jubilee line extension is an important transport project for the development of London and will add substantially to the activity and employment of the construction industry in the UK and the Community.'
The extra EIB lending agreed at Edinburgh was tilted towards creating new infrastructure in the EC, while helping to lift the European economy out of the doldrums. Britain may also receive funding for the Channel Tunnel rail link from the same source. The loan will enable the Government to point to a concrete example of how the EC is helping the British economy and to the success of the Growth Initiative agreed under the British EC Presidency.
The Government has persistently tried to inject a European element into the project, at one stage lobbying hard to move the controversial European Bank for Reconstruction and Development to Canary Wharf. However, Jacques Attali, the head of the bank, preferred a central location.Reuse content