Shareholders of troubled utilities provider Thames Water could have to cough up as much as £1.5bn to accelerate the shake-up of the scandal-hit business.
Investors will provide an initial £500m of new equity during this financial year, the group revealed, and it is working with investors on plans to provide a further £1bn of equity.
The spending is part of an £11.5bn business plan approved by the company that runs until the end of March 2025 – which aims to improve customer outcomes alongside tackling leakage and river health.
This is a £2bn increase in expenditure from the £9.6bn that was previously allocated.
Thames Water’s Chief Executive Sarah Bentley said: “Everyone at Thames is aware that we’re only at the start of our journey and there remains a huge amount to be done and delivered. We’re also aware that none of the programme can be delivered without significant capital investment.”
She argued the latest investment from its shareholders was both “vital” for its improvement and reflected investor confidence in “the long-term outlook for Thames Water.”
Water suppliers in Ofwat’s crosshairs over sewage leaks
Thames Water is the UK’s biggest water supplier, and serves almost a quarter of the UK population with water and wastewater services.
It launched an overhaul of its business in March, following reports last October that Thames Water illegally discharged the equivalent of two years’ worth of untreated sewage into rivers.
Currently, it is under intense regulatory scrutiny from Ofwat, after the industry watchdog raised “serious concerns” in March over the sector’s treatment of sewage.
It has slapped six water companies with enforcement cases, hitting South West Water with an information request earlier this week.
Ofwat has also begun cases against Anglian Water, Northumbrian Water, Wessex Water and Yorkshire Water.
The watchdog teamed up with the Environmental Agency to announce investigations into all water and wastewater companies last November.
After Ofwat began installing new monitoring equipment at over 2,200 wastewater treatment works in England last year, several water companies revealed they might not be treating as much sewage at their wastewater treatment works as they should be.
This raises the prospect of systematic discharges from water suppliers into rivers and other environments without permission.