Ofwat, the economic regulator for water companies in England and Wales has set out its PR24 vision; its ideas and ambitions for the price review that will set allowed revenues for the five years from April 2025. Ofwat says this is the moment for “fresh thinking and real change” in the face of “profound challenges”, including climate change, growing customer expectations and affordability.
Ofwat wants to align the interests of companies and investors with those of customers, so that the sector is attractive to investors, but companies can only earn high returns through strong performance. The regulator plans to look again at its approach to assessing financeability, taking account of the need to ensure there is headroom to accommodate regulatory incentive mechanisms putting more revenue at risk. Companies with borrowing costs above regulatory assumptions will, however, continue to be exposed and the highly geared face further scrutiny as Ofwat looks again at “risky structures” to address “distorted incentives”
Join David Black, CEO of Ofwat, and Moody’s to discuss:
- Ofwat’s current thinking on PR24
- ESG: the sector’s ability to contribute to the environment and net zero
- Financeability and investment
- The outlook for credit quality beyond 2025
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SpeakersNeil Griffiths-Lambeth Associate Managing Director, Public Projects & Infrastructure Finance Moody's Investors Service
David Black Chief Executive Ofwat
Stefanie Voelz Vice President – Senior Credit Officer, Infrastructure and Project Finance Moody's Investors Service
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Neil Griffiths-Lambeth is an Associate Managing Director in Moody’s Infrastructure Finance team, based in London, and responsible for the rating agency’s coverage of regulated and unregulated utilities across EMEA. Over the course of his career at Moody’s, Neil has acted as lead analyst for a broad range of utilities and transport infrastructure companies. He has followed the UK water sector since 2008, writing extensively on regulatory and other developments and playing a key role in developing the rating agency’s strong reputation in the sector. As an authoritative independent commentator, Neil is a frequent speaker at conferences and other events. Moody’s has a leading global Infrastructure Finance franchise, rating some US$2 trillion of corporate and project finance securities, representing more than 90% of all public bonds issued globally in the sector. 140 analytical sector staff cover more than 1,000 infrastructure issuers globally. Moody’s EMEA team of 50 specialists is responsible for rating around 416 issuers. The rating agency covers more than 11,000 corporate issuers and 135 sovereign nations. Prior to joining Moody’s in 2007, Neil spent 15 years at Lazard. Over this period he advised a broad range of clients on raising finance in the public and private markets. Notable transactions included advising the UK Government on support and funding for Network Rail, Veolia on the acquisition and highly-leveraged financing of Southern Water, and Wind Telecommunicazioni on funding for its network roll-out. Neil read Mathematics at the University of Sussex and pursued postgraduate research at Imperial College, London.
David Black was appointed as interim Chief Executive of Ofwat in April 2021. Prior to this, he was Chief Regulation Officer at Ofwat and led the 2019 price review, securing significant investment to improve resilience and protect the environment, alongside lower bills for customers. David joined Ofwat in 2012 as Director of Economics and became a Senior Director in 2015.
Prior to joining Ofwat, David held a number of roles in economic consulting, advising on economic regulation, competition and financial economics in the communications and energy sectors. He has also worked at Oftel, New Zealand Treasury and New Zealand Commerce Commission.
Stefanie Voelz is a senior analyst in Moody’s EMEA Infrastructure Finance team, based in London. She is currently responsible for a portfolio of regulated utilities and infrastructure issuers in the United Kingdom. Over an extended career in credit, Stefanie has developed in-depth knowledge of utilities and transportation infrastructure sectors across Europe. She is also an expert in the credit assessment of highly-covenanted financing structures in the regulated utility space as well as project financings.
Stefanie is Moody’s lead analyst covering UK Water and has published extensively on the sector. She is the lead author of Moody’s Rating Methodology for Regulated Water Utilities, last updated in June 2018. Stefanie has also been one of Moody’s lead commentators on European regulated networks.
Prior to joining Moody’s in October 2004, Stefanie worked in the credit department of Bankgesellschaft Berlin AG (now Landesbank Berlin AG) in London and Berlin, where she held portfolio responsibility for project finance transactions in the energy and infrastructure sectors.
Stefanie holds a degree in business administration (Diplomkauffrau) from the University of Applied Sciences in Berlin.