Severn Trent shares rise after firm announces plans to invest nearly £13bn in bid to cut leaks and storm overflows
Severn Trent is planning to invest £12.9bn between 2025 and 2030 as the water company seeks to set an example to a tarnished industry.
The firm described the plans as the “largest investment programme in the company’s history,” with it designed to target storm overflow spills, pollution and leakage.
Its shares were up around six per cent on Friday.
£5bn of the proposed investment package will be focused on “enhancing capacity and service beyond current levels” the firm said, suggesting most of this will go to environmental goals.
By 2030 the programme is designed to bring about a 16 per cent fall in leakage and a 30 per cent fall in storm overflows.
The plan is expected to create up to 7,000 jobs directly in the business and will also enable thousands of new work experience placements, apprenticeships and internships.
The full plan will be submitted to Ofwat on 2 October
Liv Garfield, boss of Severn Trent, said: “By 2030 we will have transformed our network to provide our customers with the very best service.
“At the heart of this ambition is a commitment to a sustainable future – from healthier rivers, to providing thousands of jobs, fewer leaks and a water supply ready for the impacts of climate change and population growth,” she continued.
A number of water companies have faced stinging criticism for polluting the UK’s waterways while paying out handsome dividends to shareholders. Severn Trent is the only supplier to receive the highest four star rating from the Environmental Agency for its performance this year.
Alongside the plan, Severn Trent said it was looking to raise around £1bn in new equity, making up about 19 per cent of the total share capital. The Qatari Investment Authority will invest £500m with Severn Trent looking for a further £500m from institutional investors.
The firm said financial resilience remains a “clear priority” and said the capital raise would ensure the investment programme was delivered “responsibly”.
The industry as a whole is grappling with historic levels of debt, with the Big Nine suppliers struggling under a £54bn debt mountain.