- Severn Trent
- 02 May 2024 17:30:21
Source: Sharecast
The FTSE 100 water firm said the move - the most substantial financial commitment in its history - was projected to bolster its real regulatory capital value (RCV) growth by 31% and generate around 7,000 jobs in the Midlands.
Targets included a 30% reduction in storm overflow spills and pollution and a 16% reduction in water leakage, aligning with the government's 2050 goals and aiming to achieve them half a decade earlier.
Additionally, the plan would put £5bn towards environmental projects, of which £3bn would be directed to the 'Water Industry National Environmental Programme' (WINEP) for the rejuvenation of natural habitats and improving river ecological conditions.
An investment of £0.7bn would fortify water resources by over 200 million litres daily, and £0.4bn would be geared towards achieving operational Net Zero by 2030, intending to cut down 240,000 tonnes of carbon dioxide equivalent.
On the affordability front, Severn Trent said that by 2029-2030, the average annual household bill calculated at current prices was set to reach £518 - an incremental monthly rise of £2.32 over five years.
To alleviate financial strains, it said it was introducing a £550m support package to assist around 693,000 customers annually by 2030, ensuring they would not bear the entire water and wastewater bill.
Severn Trent launched an equity placing to raise around £1bn to facilitate the proposed investment, upholding its credit ratings at BBB+ and Baa1.
“By 2030, we will have transformed our network to provide our customers with the very best service,” said chief executive officer Liv Garfield.
“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 £550m affordability scheme aims to ensure no customer in our region needs to worry about affording their water bill.”
At 0920 BST, shares in Severn Trent Water were up 1.75% at 2,304.54p.
Reporting by Josh White for Sharecast.com.
