Anglian water issues £225m green bond, with proceeds set for drought projects
Anglian Water has issued a green bond priced at 350 million Canadian dollars, around £225m, with the proceeds set to fund efforts to increase drought resilience in the UK.
The bond was issued today (26 August) on the Canadian bond market. The proceeds will be used to support the delivery of Anglian Water’s plans to install hundreds of kilometres of interconnecting pipes across the East and South-East of England, which have a total price tag of £400m.
These pipes will be used to move water from wetter regions in the north of the region to drier ones in the south, thus helping to improve drought resilience. Specifically, the business is planning 400km of popes to transport water from Lincolnshire to Suffolk and Essex.
The alternative, at the moment, is to increase abstraction in drier, more water-stressed areas – an approach which impacts the natural environment locally. Anglian Water has stated that it abstracts 84 million litres of water from the environment each day, that could be avoided using the project.
The regions in which Anglian Water operates, the business said, have been the driest since 1911. The summer season as a whole, it has stated, has been the driest since the 1976 heatwave.
Across England, drought has been declared in ten areas this season. The most recent declaration, for the West Midlands, came on Wednesday (24 August). The issue has been attributed to unusually long dry periods, multiple heatwaves and historic failures to improve the nation’s water infrastructure.
Anglian Water’s treasurer Jane Pilcher commented: “The impacts of climate change are acutely impacting the water industry in the UK, and the world over. Ours is the driest region in the UK and particularly vulnerable to climate change. Therefore, reducing our carbon emissions and adapting to the climate emergency is embedded in everything we do. Spend on resilience to climate change and environmental protection is vitally important.”
Anglian Water issued its first green bond back in 2017 – a £250m package placed on the UK’s market. The new bond issued this week is its eleventh. Notably, all debt investment made by the firm during the 2021-22 financial year has been through green or sustainability-linked finance.
Today’s news comes shortly after Anglian Water unveiled proposals to build two new reservoirs in the East of England – one in Cambridgeshire, to be delivered in partnership with Cambridge Water, and the other in Lincolnshire, to be delivered in collaboration with Affinity Water. A site selection study will be published later this year.
Announcing the reservoir plans, the firm’s director of strategy and regulation Alex Plant said: “The current situation presents an obvious backdrop as to why projects like this are needed, but the reality is because we’ve known the future promises many more people, but far fewer raindrops, we have been working on these projects for years, as we know how long they take to come to fruition.
“Getting these projects underway now means the chances of our taps running dry are significantly reduced, as well as helping us take a big step forward in protecting the environment by reducing how much we take from elsewhere in the region.”
Water companies in the UK are coming under much fire from customers, though, with debate rife on how best to ensure that they end leaks. Domestic and business customers have stated that this should be just as important as improving efficiency at the customer level. Anglian Water has been named by NationalWorld as the least leaky of the nation’s 17 biggest water suppliers, with Thames Water reporting the most leakage.
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