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(Alliance News) - Water companies including Severn Trent PLC and Pennon Group PLC will invest GBP850 million in new environmental projects, the UK industry regulator Ofwat said on Monday.
FTSE 100-listed Severn Trent will spend GBP565 million in plans approved by Ofwat, having originally proposed GBP730 million Pennon, a FTSE 250 company that owns South West Water, will invest GBP81 million.
The companies will be spending their own money on the projects with no government funding, the regulator said. Pennon said there will be no impact on customer bills before 2025. Severn Trent said in its original proposal that it will "keep bills affordable by bringing in new finance to fund 85% of the projects upfront," and that most customers are willing to pay higher bills to support green initiatives.
"We'll be accelerating our capital spend to deliver these impressive plans and to achieve our existing commitments earlier," Severn Trent Chief Executive Liv Garfield said in today's announcement.
In addition to the GBP850 million of new spending, GBP1.9 billion of planned green projects from water companies will be brought forward, Ofwat said.
The plans come after Ofwat and the UK government last July asked the water companies to make plans to support a green economic recovery from the virus pandemic. Projects include helping customers save water and taking action to prevent storm overflows - when sewage is discharged into rivers. Pennon said its projects will include restoration of peatland.
Ofwat's approval of the plans is a draft decision, and a final decision will be made in July after a public consultation. Severn Trent said it expects no material changes to the draft decision.
Severn Trent shares were down 0.2% at 2,504.00 pence in London. Shares in Pennon were down 0.5% to 1,040.80p.
By Ivan Edwards; ivanedwards@alliancenews.com
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