The loan, which is one of the largest ever loans agreed between the EIB and a UK water company, will be used to help fund the water company’s AMP6 work, which will total £6.2 billion between 2015 and 2020.
This includes a £3.3 billion capital investment programme which features the £255 million Birmingham resilience project.
EIB vice president Jonathan Taylor said: “The EIB is committed to supporting long-term investment in water infrastructure across the UK and around the world.
“The new support represents one of the largest ever loans by the EIB for investment in the UK water sector and is testimony to the hard work done by Severn Trent in recent years and their ambitious plans for the future.”
Since 1978 the EIB has provided more than £2 billion in investment in water infrastructure across the Severn Trent region and it is the largest lender to the UK water sector.
Severn Trent posted a pre-tax profit of £540.3 million last month (up 3.2 per cent on the previous year) and chief executive Liv Garfield stated the results and performance over the AMP5 period have helped lay solid foundations for AMP6.