Severn Trent (SVT) Status Update summary

Key changes in the final determination

• Real RCV growth set at 45%, reaching £17.2 billion by 2030 in 2022/23 prices, a £3 billion improvement over the draft determination, and 64% nominal growth to £21.6 billion.

• Ofwat approved £14.9 billion of totex for 2025–2030, up £3.1 billion from the draft and double PR19 levels, with 95% of the total funding request approved.

• WACC finalized at 4.16% (company-specific), sector WACC at 4.03%, with a 5.4%/5.1% cost of equity, 3.15% cost of debt, and a 30bps outperformance adjustment.

• Significant improvements in ODIs, especially for external sewer flooding and greenhouse gases, with 15 out of 22 ODI commitments improved and incentive rates adjusted.

• Severn Trent bills remain the second lowest in England, with a £575 million affordability package supporting 1 in 6 households by 2030.

Investment and operational plans

• Enhancement spend totals £6.4 billion, including £1.5 billion for storm overflows, £1.1 billion for asset upsizing/net zero, and £300 million for rural water quality and PFAS.

• Ambitious spills reduction programme aims to halve storm overflow usage by 2030, with investment in 70 waste treatment works and 1,400km of water mains replacement.

• Biodiversity initiatives to protect 3% of England's nature recovery network and river health improvements to account for just 2% of RNAGS by 2030.

• Broad and diverse supply chain, in-house design team, and 'plug and play' delivery model support high growth and investment deliverability.

• Price Control Deliverables and stepped-up capex run rate provide further growth opportunities.

Financial and risk management

• Enhanced cost-sharing rates and true-up mechanisms for energy, business rates, and material costs provide financial stability and reduce investor risk.

• Over £2 billion liquidity and stable Baa1/BBB+ credit ratings support continued low-cost financing.

• All debt issues in AMP8 at or below new debt allowance, with a strong track record of financing outperformance.

• Outperformance on ODIs and financing expected to continue, reducing need for additional financial levers.

• 70% of enhancement TOTEX protected by true-ups for plant, materials, wages, and energy.