Ofwat: only robust retailers to get licences in the Covid world
Ofwat has told would-be water retailers it will not grant them licences unless they can demonstrate robustness in the face of Covid 19 pressures.
The regulator has issued a clarification to its Water Supply and Sewerage Licence application guidance. This said Ofwat would “only grant licences where applicants provide compelling evidence of robust capitalisation and strong financial resilience. This should be demonstrated by substantial shareholder investment that is clearly ring-fenced for that applicant with no recourse to market liquidity support measures.
“Ofwat will only progress applications where applicants provide sufficient evidence to demonstrate they have taken into account the impacts of Covid-19 on their business plans. This should include impacts on financial projections and evidence of testing against a number of scenarios (such as a possible reduction in customer numbers and/or adverse customer growth). We also expect applicants to evidence that they are keeping up to date with developments in the business retail market.”