Welsh Water has signed a £250 million loan facility with the European Investment Bank. The loan will help finance the company’s extensive capital expenditure programme and its plans to further develop renewable energy generation capacity at its sites.

To help it reduce its energy costs, the not-for-profit utility already generates 20% of its own energy from renewable sources through wind, hydro, solar and advance anaerobic digestion – with the aim to increase this to 30% by 2019.

The company has also signed a new energy contract with DONG Energy which will ensure that energy Welsh Water uses from the grid will also be guaranteed green energy.

The move to secure green energy is a major step forward for the company which has an annual energy bill of more than £44 million pounds - the majority of which is used for pumping water and wastewater through thousands of miles of pipes.

Last week the EIB visited the company’s Five Fords wastewater treatment works in Wrexham to see first hand how the company will make use of the loan to invest in renewable generation.

Jonathan Taylor, Vice President of the European Investment Bank said:

"Here in Wrexham Welsh Water is showing the world how investment to improve wastewater treatment can harness renewable energy from diverse sources. Pioneering innovation such as this is crucial to cut emissions and ensure that companies can contribute to climate action. The European Investment Bank is pleased to have supported this and other transformational investment by Welsh Water.”

Welsh Water is investing around £36 million to transform Five Fords wastewater treatment works into an innovative energy park - incorporating solar and hydro and the UK’s first project to inject bio-methane gas into the national gas distribution network.  The company is also developing an advanced anaerobic digestion plant on the site which once complete will use the waste the site treats to generate enough energy to supply around 3,000 homes.

The water company, which has the highest credit rating in the UK’s utilities sector, has benefited from loans of over £800 million from the European Investment Bank since the inception of Glas Cymru in 2001. Peter Bridgewater, Welsh Water’s Finance and Commercial Director said:

"As a company without any shareholders, our sole focus is on providing the best possible service to our customers at the most affordable price. To deliver this, we must manage challenges such as accessing funding for our investment programmes at a competitive rate as well as continuing to drive down costs as we make the company more efficient. We are therefore delighted to have secured this loan facility as it helps us deliver higher investment and lower bills for our customers.”

Steve Wilson, Welsh Water’s Managing Director of Wastewater Services added:

“We are delighted to begin our contract with DONG as it secures green energy for the next five years while offering good value for our customers.   “We’ve significantly increased the amount of energy we generate at our sites over the past few years by embracing technologies such as solar panels, hydro turbines, anaerobic digestion and our first wind generation sites in the past 12 months. By incorporating these sources with the green energy we now receive from DONG, we really are able to make a meaningful contribution to protecting our environment from the effects of climate change.”