Severn Trent is to increase customers’ bills by almost 37% by the end of the decade and has raised £1bn in investment – half from Qatar’s sovereign wealth fund – to pay for a multibillion investment plan to improve its water network over the next five years.
The company, which has 4.2 million customers, said the average annual household bill would rise from £379 in 2024-25 to £518 in 2029-30.
It predicted that by 2030 the cost of a bill would be 1.3% of the disposable income of a typical household in the Severn Trent region, compared with 1.2% today, and attempted to soften the blow by announcing a £550m financial support package for struggling customers.
“Severn Trent recognises that while this increase is spread over a long period, today’s announcement comes at a difficult time for some customers,” the company said. “That is why we have included a £550m financial support package as a core part of the plan. This will help 693,000 customers pay their bill each year by 2030.”
The company plans to invest a record £12.9bn on its network over the next five years, including £5bn on projects designed to tackle the water industry’s poor environmental record, which it said would create 7,000 jobs across the Midlands region.
As part of the investment plan, Severn Trent is raising £1bn, with £500m from the Qatar Investment Authority, to “ensure we can deliver this scale investment programme responsibly”.
“We are consistently named in the top category for financial resilience by [water regulator] Ofwat,” the company said. “And this remains a clear priority for us.”
The QIA is a top-five shareholder in Severn Trent, holding a stake of 4.9%. The water company’s biggest shareholders are BlackRock (13%) and Lazard (7.45%).
Earlier this week, Ofwat ordered water companies in England and Wales to return £114m to customers through lower bills next year because progress on leakage and sewage spills had been “too slow”.
skip past newsletter promotion
Sign up to Business Today
Free daily newsletter
Get set for the working day – we’ll point you to all the business news and analysis you need every morning
Enter your email address Enter your email address Sign upPrivacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply.
after newsletter promotion
In May, water companies in England apologised to customers and announced £10bn in infrastructure upgrades to fix the sewage problems, which will ultimately be paid for by customers.
