A vote to leave the European Union would result in the UK giving up billions of pounds of infrastructure investment every year, the Prime Minister warned on Saturday – an outcome which has significant implications for the UK water sector.

An exit from the EU would terminate Britain’s membership of the European Investment Bank (EIB), an organisation which has invested more than £16 billion in UK projects over the past 3 years.

The EIB has been the largest source of financing for long-term investment in UK water infrastructure since before privatisation.

On Friday the EIB confirmed a £700 million injection of finance for the £4.2 billion Thames Tideway Tunnel, the biggest infrastructure project ever undertaken by the UK water industry. The Bank is the world’s largest lender for water-related investment and the backing for the Thames Tideway Tunnel represents the largest-ever loan for water investment worldwide.

The Prime Minister’s comment at the weekend is the first time the government has warned of the significant effects of walking away from the EIB.

Prime Minister David Cameron said:

“We know leaving the EU would result in an economic shock in the UK, after which we would be permanently poorer. We also know businesses would lose access to the single market of over 500 million people, and the contraction of our economy would mean less money for public services.”

“But something less remarked upon is the devastating impact on future infrastructure investment of our expulsion from the European Investment Bank. Vital projects across every region of the UK have been financed by the EIB. “

“Not only would leaving the EU see us wave goodbye to this crucial funding – but, with a smaller economy hit by new trading barriers and job losses, it’s unlikely we’d be able to find that money from alternative sources.”

The EIB operates outside of the EU budget and is financially autonomous. The UK – its joint-largest shareholder – is a significant beneficiary. The bank offers long-term investment loans to EU member states on favourable terms and its mission is to support economic growth across Europe.

The UK has more than doubled the volume of investment it receives from the EIB since 2012, and in 2015 EIB lending in the UK totalled a record €7.77 billion, representing 11.2% of its overall lending to EU countries.