YORKSHIRE Water has pledged it will improve its financial resilience after Ofwat's investigation into the company lending more than £900 million.

Ofwat opened an enforcement case due to concerns about loans Yorkshire Water had made to two other water companies, totalling around £940 million.

The water regulator then concluded in November 2021 that Yorkshire Water had "weak levels of financial resilience" and had to strengthen this to the level "reasonably expected" of a provider of essential public services. 

In March 2022, Ofwat then opened a separate, ongoing enforcement case into the company in relation to the operation and performance of its wastewater treatment works. 

Yorkshire Water are going to be repaid the full amount of the loans by March 2027 and keep their improved financial structures in place.

As previously reported in The Press, Ofwat has ordered the water company to offer their customers a discount next year due to missing their yearly targets this year.

David Black, Ofwat Chief Executive, said: "Companies must be financially resilient if they are to tackle the challenges that affect customers and the environment.

"Customer service and the environment can suffer if a company with poor operational performance does not have the financial flexibility to turn around poor performance.

"We are pleased that Yorkshire Water recognised our concerns and is taking these active steps to improve its financial position in the interest of customers.

"We welcome the additional £100 million shareholder funded investment to take urgent action to reduce spills from storm overflows."

Ofwat has now closed its investigation as Yorkshire Water has addressed Ofwat’s concerns by putting forward a structured repayment plan and secured additional benefits to customers.

A Yorkshire Water spokesperson said: “We understand the importance of continuing to have robust financial structures in place and the repayment of the intercompany loans will continue our resilience into the future.

"We’ve agreed with Ofwat that the loans, totalling approximately £940m, will be repaid before end of March 2027 and this will likely include capital injections from shareholders.

"The current external economic uncertainties are a reminder of how important it is that we are financially resilient, and the repayment of these intercompany loans is a prudent measure to continue our resilience into the future.

"Our shareholders have committed to helping us make this repayment including the additional investment in storm overflows which will have a significant impact on our rivers and coastlines here in Yorkshire.”