Green recovery – Severn Trent sets out plans for £730m+ investment package

Severn Trent has set out its plans for a package over £730 million of investments as part of the Green Recovery – if approved, the company expects to start work on the new investments within a matter of weeks of getting the go-ahead. The water company said that only 15% of the cost would go directly on to customers’ bills – Severn Trent will provide 85% of the funding needed upfront by raising new finance which will then be recovered over a longer time period. Severn Trent estimates that the cost to customers will be £6 extra per year on average. According to in its latest trading update for the period 1 October 2020 to 4 February 2021, the utility is currently in constructive dialogue with Ofwat and DEFRA on the potential investment opportunities for Severn Trent as part of the Government’s Green Recovery initiative.

The update says the utility is continuing to deliver strong operational performance and resilient financial results and remains confident of delivering full-year results in line with expectations. 

Green Recovery investment opportunity

Severn Trent submitted its proposals to Defra and Ofwat at the end of January – the next step is for Defra and water industry regulators, including Ofwat, to review the plans. If approved, the company expects to start work on the new investments within a matter of weeks.

“As well as providing meaningful RCV4 growth on top of our c.4% growth rate for AMP7, we believe our proposals would support our environmental ambitions, create much needed jobs in our region and support national sustainability objectives on climate change, flood resilience, river water quality and water consumption.” 

Creating bathing rivers

Severn Trent will transform important stretches of rivers (49km in total) between Coventry and Stratford on the River Avon, and around Ludlow on the River Teme so they are healthy enough to swim in for the one million people living nearby. 

Protect homes from flooding 

Lead pipe removal from customer-owned supply pipes 

Smart metering – large-scale trial of 157,000 smart water meters roll out 

Accelerating environmental improvements

Severn Trent is looking to support environmental improvement to 500km of river, through accelerated delivery of its Water Framework Directive statutory obligations, including the delivery of 35 additional phosphate removal projects and improvements to storm overflows.

Decarbonising water resources

Severn Trent plans to provide an extra 109 Ml/d of additional water supply with a net-zero carbon impact.

Click here to read the Severn Trent Green Recovery proposals in full.