Pension Insurance Corporation has invested £100m (€131m) in the Thames Tideway Tunnel (TTT), participating in an inflation-linked debt issue to fund the London sewer.

The £100m deal, listed on the London Stock Exchange, comes in addition to a £250m issue announced by Bazalgette Tunnel Limited on 16 June, part of its efforts to finance £3.1bn of the £4.2bn project, which will modernise the UK capital’s ageing sewer network.

PIC’s investment is in inflation-linked debt issued by Balzalgette, the special purpose company formed to construct and operate the tunnel.

PIC said the debt would be split across four tranches and be drawn down over a 4-5 year period.

Allen Twyning, head of debt origination at PIC, said the insurer was “proud to have become a significant investor” in the project.

“For us,” he added, “the long lifetime of the project and the secure cash flows are a very good match for the pension payments we are committed to making decades into the future.”

Pedro Madeira, treasurer at Bazalgette, added that PIC was “exactly the kind of investor we want to invest in Tideway”.

“PIC was flexible in helping us conclude this transaction,” Madeira said, “and there was a high degree of cooperation and goodwill in working around the clock to agree documentation.”

In its separate announcement to the London Stock Exchange about the £250m transaction, Bazalgette said it would be split in three tranches, maturing over three years to 2052, with deferred purchase dates also staggered over three years starting in June 2018.

PIC has long been interested in the project, with Twyning telling IPE Real Estate sister publication IPE in late 2014 that it looked “particularly attractive”

The project has attracted support from a number of local and European pension investors, including Denmark’s Industriens Pension and UK pension funds backing the Pensions Infrastructure Platform.

The UK investors in 2015 committed £370m through a vehicle managed by Dalmore Capital and are now among the shareholders of Bazalgette, alongside Allianz and Amber Infrastructure.

The European Investment Bank last month also announced it would extend a £700m, 35-year loan to the project.