Yorkshire Water receives fresh funding despite sewage fines and pay row | Water industry
A leading European investor is to pump new funds into Yorkshire Water, including helping cover a £600 million loan, despite recent hefty sewage fines and an executive pay scandal at the utility company.
EQT, a Swedish private equity group, said on Monday it would take a 42% stake in Kelda Holdings, the Jersey-listed parent company of Yorkshire Water, which has 5.7 million customers in Yorkshire and parts of the East Midlands and Lincolnshire.
The move will effectively make it a co-owner of Yorkshire Water and increase the stake of one existing shareholder, GIC, an investment firm, to 42% and TCorp, the investment vehicle of Australia’s New South Wales public sector, to 16%.
EQT said part of the deal would include contributing to a £600 million “intercompany loan repayment” due before March 2027, and that it “fully supports” spending plans to clean up Yorkshire’s record on sewer leaks.
The buying group has already invested in four British plants that generate electricity by burning domestic and commercial rubbish through its stake in waste-to-energy company Encyclis, and in water purification operations spanning the US, the Caribbean and Latin America. website.
The deal comes as Yorkshire Water faces increasing scrutiny over its environmental records and executive pay. Last month he was fined £700,000 for repeatedly releasing sewage into the stream.
A series of sewage pollution incidents in 2018 at Pools Brook country park near Chesterfield killed fish and insects and polluted the river for more than half a mile, the Environment Agency said in February.
Last year, the Guardian revealed that its chief executive, Nicola Shaw, had received a previously undisclosed £1.3 million in extra pay since 2023 through the offshore parent company. Shaw was given £660,000 from Kelda in the 2023-24 and 2024-25 financial years and the size of the fees was not disclosed in Yorkshire’s annual report.
This led the government to decide to close loopholes that allowed water company bosses to continue receiving huge bonuses despite a ban that came into force last year.
Bosses of companies illegally dumping sewage into Britain’s rivers and seas, including Shaw in Yorkshire, were paid millions in bonuses despite the ban. MPs said the loopholes allowed companies to get around the bonus ban by labeling payments differently or paying bosses through linked companies.
On Monday, Shaw called the new investment “a huge step forward.” He added: “The EQT team will bring additional expertise to our board and their support will be a strong vote of confidence in our plan to improve performance and the progress we have made so far.
“EQT has a long-term perspective and its team is committed to supporting the delivery of our £8.3bn investment programme.”
Kunal Koya, a partner at EQT Infrastructure, said the company was a “responsible private equity manager” and could help “modernise” the water sector.
