New £20.5bn Performance Improvement and Turnaround Plan to transform Thames Water’s operations for customers and the environment

£9.4bn investment in existing waste and water assets over the next five years - a 45% increase
£3.9bn investment in high-pollution sites to reduce sewage spills, deliver cleaner waterways and rebuild public trust as quickly as possible
£2.7bn investment to address single point of failure risks and build enhanced resilience to extreme weather and population growth pressures
£1.2bn investment in critical risk areas across the supply of clean drinking water, sewage and cybersecurity
Billions of pounds in new funding will deliver improvements with no need for increases in customer bills beyond those already agreed for the five-year period to 31 March 2030

LONDON, Sept. 03, 2025 (GLOBE NEWSWIRE) -- A major new plan to invest, upgrade and turn around Thames Water’s operations has been submitted to Ofwat by the London & Valley Water consortium. The Performance Improvement and Turnaround Plan will deliver a step-change in customer service and environmental outcomes with a focus on cleaning up waterways, maintaining supply of highest quality drinking water, reducing pollution, building operational resilience and strengthening asset health. The plan will fix the foundations of Thames Water and set a clear pathway to addressing current compliance gaps.

The London & Valley Water consortium is comprised of a number of significant Thames Water senior creditors who are leading investors with a proven track record in infrastructure. It includes major UK and international pension and insurance funds, asset managers and investment funds. The consortium has come together to build a market solution which delivers financial resilience and rebuild a stronger Thames Water without the need for any taxpayer funding or Government support.

Billions of pounds of new funding from the London & Valley Water consortium will unlock £20.5bn of strategically targeted investment and operational expenditure over the next five years. Investment will focus on reducing pollution events and leakage, enhancing power, cyber security and climate change resilience, and delivering improved digital customer service. This investment is essential to build water supply and mitigate the complex challenges Thames Water faces, including increased population growth, the compounding impacts of climate change and more extreme weather events.

In order to keep customer bills in line with those agreed for the next five years, Thames Water will need billions of pounds of new investment to fund the £20.5bn spending plan. A comprehensive recapitalisation, which will include committed new funding from day one and significant write-offs by investors across the capital structure, will reset the balance sheet and deliver a financially sustainable Thames Water for the first time in a generation.

The submission of the Performance Improvement and Turnaround Plan follows months of extensive engagement with and feedback from Ofwat. The consortium is fully committed to a new transparent and collaborative relationship with regulators to ensure Thames Water is held to account, is set up to succeed and can deliver for customers in the long-term.

Commenting, Chair Designate Mike McTighe said:

“Over the next ten years the investment we will channel into Thames Water’s network will make it one of the biggest infrastructure projects in the country.

"Our core focus will be on improving performance for customers, maintaining the highest standards of drinking water, reducing pollution and overcoming the many other challenges Thames Water faces.

"This turnaround has the opportunity to transform essential services for 16 million customers, clean up our waterways and rebuild public trust. I am confident we have the stretching plan, a highly motivated team and the track record required to deliver a Thames Water that is fit for the future."

Delivering customer priorities and value for money

The Performance Improvement and Turnaround Plan will deliver excellent value for customer money and address their priorities by increasing capex investment in existing waste and water assets by 45%¹. The company will spend £9.4bn over the next five years in areas such as:

Protecting public health, safety and the delivery of high-quality drinking water: £1.2bn invested in health and safety and security of critical sites including physical, cyber-attack and digital resilience. The latest UV technology will be installed at key treatment sites to ensure the highest standards of drinking water.
Upgrading high-risk sewage treatment sites where there is the most significant customer and environmental impact: £3.9bn invested to ensure return to full compliance as quickly as possible.
Strengthening overall resilience: £2.7bn spend focused on addressing single point of failure risks and stopping pollution incidents.
Stopping leaks more quickly: accelerated replacement of old Victorian mains as part of plan to reduce supply interruptions by 25%.

A plan to clean up the waterways and reduce environmental damage

The Performance Improvement and Turnaround Plan will deliver a root and branch solution to address Thames Water’s poor environmental record, including rectifying asset health issues that increase the risk of pollution incidents. The Plan sets a target of achieving at least 135 fewer pollution incidents a year² and restoring Thames Water’s sewage treatment works and other sites to regulatory compliance.

An important part of achieving this ambition is an immediate and urgent investment programme to upgrade asset power resilience at sites where this has historically been one of the key single points of failure across water and wastewater. Between 2019 and 2022, 14% of serious pollution incidents and 30% of sewage pumping station incidents were caused by power failures or outages.

Tackling these overdue upgrades by directing investment into operational resilience and asset health simultaneously across critical sites will help reach compliance sooner than would have otherwise been possible. This model will also bring greater efficiency to Thames Water’s resources and spending by focusing on high-risk sites.

Increased operational investment will see 2,500km of sewers cleaned every year - almost doubling the current rate - to reduce and prevent pollution incidents. A record £900m will be invested in the most effective techniques to clean up local areas, protect rivers and prevent further damage³.

Building network resilience by fixing the fundamentals and strengthening asset health

At the heart of the long-term transformation will be building Thames Valley’s resilience and protecting London’s water quality to reduce any supply interruptions and prevent major disruptive or dangerous incidents.

The latest UV treatment and filtration technology will be installed to upgrade the four largest water treatment sites to make sure Thames Water’s customers are receiving the highest quality drinking water and as part of a commitment to prioritise public health and safety investment.

The consortium’s work to date has identified the most serious risks and critical points around London’s infrastructure, including trunk mains in London. These trunk mains move water from treatment works across the network to various service reservoirs, close to other critical infrastructure such as roads, tube and railway lines, making them vital priorities for upgrades.

This investment is essential to build greater efficiency within the water supply and mitigate the complex challenges Thames Water faces, including increased population growth, aged infrastructure, the compounding impacts of climate change and more extreme weather events.

Key to improving resilience will be reducing leakages through mains replacement and an overhaul of Thames Water’s ‘Find and Fix’ approach to identifying and acting on leaks. This new approach will help achieve a new goal to reduce supply interruptions by 25%, delivering better value and acting on customers’ top priorities. This new target would see the largest ever reduction in Thames Water’s leakage during AMP8, whilst driving long term leakage reduction with an ambitious increase in the rate of mains replacements.

This long term plan to deliver improvements will ensure investment in mains replacement over the coming decade, with £545m targeted to replace around 370 km of water mains by 2030, ramping up each year to reach 1000km in AMP9, an increase of 360%⁴.

This gradual acceleration will put Thames Water on a sustainable footing to deliver the huge volume of upgrades needed in their entirety in the long term, while balancing the disruption that mains works cause to local communities.

Notes to Editors:

About London & Valley Water

London & Valley Water is a consortium of senior creditors of Thames Water. The consortium members are international and UK investors with a proven track record in infrastructure and include major UK and international pension and insurance funds, asset managers and investment funds.
They have come together to develop a strengthened long-term proposal, which has been submitted to Ofwat, to restructure and rebuild a stronger Thames Water with a market-led solution that avoids the need for any taxpayer funding or Government support.
The London & Valley Water proposal is still subject to ongoing discussion, with the aim of reaching an agreement in the Autumn which will help stabilise Thames Water and deliver for customers and the environment in the long-term.
For more information please visit https://www.londonandvalleywater.com/

Contact:

Niamh Fogarty niamh.fogarty@hanburystrategy.com / 07946 813 843

¹ Compared to AMP7
² 30% less pollution incidents compared to 2024 performance
³ +£75m on 1,000km extra sewage cleaning than FD
⁴ +360% rate of mains replacement compared to AMP7

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