FINANCING THE CHANNEL TUNNEL
When Gamal Abdul Nasser nationalized the Suez Canal in 1956, Jacques Georges-Picot, chairman of the Cimpagnie Universelle du Canal Maritime de Suez, consoled his fellow board members. "Never mind, we will build the Channel tunnel,' he told them. Thirty years on his prophecy has come true. Banque Indosuez is one of the five arranging banks for the CTG-France-Manche project and, like the others, committed to raising 200 million.
The largest project finance operation of the 20th century calls for bank credits of about 5 billion, (4.5 billion of which is already covered by 33 international banks), and a further 650 million to 1 billion in the form of equity. According to Indosuez, the project is moving towards a formula in which one-third of the capital will be raised in Britain, one-third in France and one-third elsewhere.
Unlike the canal--whose cost more than doubled during construction, from 200 million gold francs to 420 million--the tunnel is expected to be completed within the estimated ceiling. "A year ago', said Jean-Jacques Hessig of the international project financing division of Credit Lyonnais-- also, with National Westminster, BNP and Midland, one of the five arranging banks-- "nobody was convinced the project could be financed without certain state guarantees.