News

Question 1

Talk about the fine that has recently been placed in water companies for missing sewage targets (£158m)

Answer 1

Question 2

What’s been the main operation issue with water companies

Answer 2

Low quality of treated wastewater
Failing to manage sewage spills and leaks

Question 3

What’s been the main operation issue with water companies

Answer 3

Low quality of treated wastewater
Failing to manage sewage spills and leaks

Question 4

What’s been the main operation issue with water companies

Answer 4

Low quality of treated wastewater
Failing to manage sewage spills and leaks

Question 5

How will Ofwat fines to UK water companies be imposed

Answer 5

In the form of rebates to customers

Question 6

Who will have to pay the biggest fine and how much?

Answer 6

Thames Water will have to make the largest repayment to customers of £56.8 million , despite improving its overall performance from last year.

Question 7

Talk about the proposal from the campaign group, Wildfish

Answer 7

Wildfish is tabling amendments to the bill that it believe could reduce sewage pollution more quickly
1. Requiring the Environment Agency (not the water companies) to monitor sewage discharge on rivers
2. Water companies should be required to release real-time sewage efficient data to the public

Question 8

Kemble Bond default

Answer 8

Holding company of Thames Water missed the deadline in April 2024 and defaulted on about £400 million worth of debt

Question 9

Why did the Kemble default on its debt

Answer 9

1.High debt levels
2, Withdrawal of funding
- prior to the default, a planned £500 mill of funding injection from investors was withdrawn. This capital was meant to help Kemble’s debts and support Thames Water’s operations.
3. Challenging regulatory environment

Question 10

What actions have been taken since Kemble’s defaults?

Answer 10

1. Engaging with creditors (asking them not to take immediate action to create a stable environment before restructuring solutions are explored)
2. Exploring restructuring
   - ongoing discussions with lenders, including banks like ING
3. Talks of a special administration regime (SAR) where TW would be temporarily nationalised and Ofwat would take control to keep operations running until a new buyer or restructuring plan is arranged. - probably won’t happen due to government budget

Question 11

What are Thames Water’s plans for the future?

Answer 11

1. Stabilisation and restructuring
2. Possible Equity Injection
   - TW have been exploring a significant equity raise, targeting around 3.3 billion
3. Debt to equity swaps

Question 12

Talk to me about a recent price of news around renewable energy.

Answer 12

Grid infrastructure globally needs to be updated to accommodate increase in renewable energy
- the world is adding renewable energy capacity at record rates
- Investments in renewables surpassed $700 billion last year.
- Despite this, the infrastructure for transmitting and storing renewable energy has not kept pace.
- The intermittent nature of renewable sources like solar and wind means that energy needs to be stored or immediately used when generated, but the grid lacks the capacity to manage this surge.
- Need for government to update grid infrastructure to accommodate new energy sources.
- California’s approach with incentives for battery storage is highlighted as a model.

Question 13

What is something that KPMG infrastructure has been involved in?

Answer 13

They’ve helped clients navigate new regulations such as the infrastructure investment and jobs act (IIJA) in the US which involves managing over $185 billion in funding for over 6000 projects.

This act aims to address the US infrastructure deficit, enhance resilience and support the transition to a sustainable and equitable economy .