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Severn Trent has announced plans to raise £1bn through an equity placing, with £500m secured from the Qatar Investment Authority.
The other half will be generated through a share placing to institutional investors, as the water company looks to embark on the largest investment programme in its history.
In a separate offer, UK retail investors will have an opportunity to acquire retail offer shares up to £8m with further details to be released. Certain directors of Severn Trent have also contributed £275k after subscribing to shares. In total, the new shares are expected to represent 19% of the existing share capital of the firm.
All funds generated as set to form the equity portion of an ambitious business plan released today, set to create 7,000 jobs.
Severn Trent said it plans to add £12.9bn of total expenditure across the network, with £5bn directed towards securing new water resources, addressing 99% of the reasons attributed to poor ecological rivers, eliminating 240,000 tonnes of CO2e and delivering operational Net Zero by 2030.
7,000 jobs are expected to be created as part of the ambitious programme, which looks to add £12.9bn of total expenditure across the network, with £5bn directed towards securing new water resources, addressing 99% of the reasons attributed to poor ecological rivers, eliminating 240,000 tonnes of CO2e and delivering operational Net Zero by 2030.
Under the plan, Severn Trent customers can expect to see bills rise for the average household from £379 a year in 2024/25 to £518 a year by 2029/30.
The firm has launched a £550m financial support package for those struggling with the increase, which will help 693,000 customers pay their bill each year by 2030, the equivalent of one in seven customers across the region who will not have to pay a full water and wastewater bill.
It also claims that the number of customers expected to benefit from financial support exceeds those forecast to be in water poverty by 2030.
Liv Garfield, CEO at 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. At the same time, our £550 million affordability scheme aims to ensure no customer in our region needs to worry about affording their water bill.
“We’ve listened hard to our customers – not only will we make sure we keep building on our sector-leading track record, but we will also work to make our region proud of their water company. This investment will contribute to our positive economic, environmental and social impact in the communities we serve for decades to come.”
The Business Plan has been developed for the period between April 2025 and March 3030 and will be submitted to Ofwat on Monday (October 2).
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