Shareholders invest £550 million into Southern Water

The water company, which provides water and wastewater services across Kent, Hampshire, the Isle of Wight and parts of Sussex, has welcomed an announcement that Macquarie Asset Management have agreed to invest an additional £550 million of equity into the Southern Water group.

The £550 million will will be divided between £375 million being invested into protecting the environment and ‘better serving customers’. The remaining £175 million, the company said, will be invested into the wider Southern Water group to support ‘financial resilience.

The latest investment follows a £1.1 billion equity injection into the group in 2021.

Lawrence Gosden, chief executive officer of Southern Water, said: “We would like to thank Macquarie for its continued support, which will enable us to increase investment per household to more than £1,500 this regulatory period and manage the impact of cost inflation and higher funding costs on our business. Macquarie’s additional investment is a strong vote of confidence in our operational transformation. It will help us to deliver on our ambitions to customers and position Southern Water well for further future investment in our network.”

A spokesperson for Southern Water said: “The new funding will enable us to increase planned capital investment in our network by 50 per cent to £3 billion (from £2 billion) during this regulatory period (2020-25), equivalent to investing £1,500 per household in our area.

“Our Turnaround Plan is focused on ensuring a reliable supply of water for our customers; protecting and improving the health of rivers and seas by building capacity and resilience at our waste-water treatment works and sewer network; making our customer service easy and trusted; and becoming an industry-leader in health and safety.

“We were awarded a two-star Environmental Performance Assessment Rating by the Environment Agency for 2022, up from one-star for 2021. We recognise that we have further to go, and the Turnaround Plan sets out our ambition to reach a three-star rating by 2025.”

In recent years the company has come under significant fire for repeated incidents of sewage being dumped into the sea and waterways in Sussex. In 2021 it received a record-breaking fine of £90 million due to unprecedented amounts of sewage dumping.