Thames Water customers may experience changes to the services provided if a consortium of creditors, known as London & Valley Water, secures approval for its rescue plan. This information surfaced in a business plan outline released by the creditor group, which holds a significant portion of the company’s debts. The proposal outlines the intent to allocate approximately £20.5 billion from consumers for essential activities but indicates a reduction in the number of projects compared to the prior arrangement established by the water regulator Ofwat.
Sources suggest that the new proposal arises from concerns that Ofwat’s last year’s detailed pricing plan, which dictates supplier charges, is unfeasible. The consortium argues that its approach will ensure financial viability for Thames Water and avert a possible temporary nationalization of the utility, which serves 16 million customers. The four-page summary of the plan mentions “significant write-offs by investors” but lacks specifics on the extent of these reductions.
Negotiations between the creditors and Ofwat regarding the financial structure of the plan, including investor debt reductions, are ongoing. Following these discussions, the proposal will be evaluated by credit rating agencies to determine whether Thames Water can regain its investment-grade status, a stipulation for its operating license.
Ofwat has agreed to defer consideration of Thames Water’s proposal to increase bills until October, allowing time for alternate solutions to be considered. Insiders indicate that the current plan effectively revises the earlier pricing determination, which some view as an expected step in resolving the company’s financial troubles. The exact amount of additional funding, aside from the £20.5 billion from consumers, has not been disclosed.
An Ofwat representative stated that the regulator is reviewing the creditors’ plan to ascertain its potential to improve Thames Water’s operational performance and financial stability. The chair of London & Valley Water emphasized the consortium’s focus on enhancing service quality, reducing pollution, and fostering public trust in the company.
Source: https://www.theguardian.com/business/2025/sep/03/creditors-set-out-20bn-plan-to-save-thames-water