A major European investor is to inject new funding into Yorkshire Water, including helping to cover a £600m loan, despite recent heavy fines over wastewater and a scandal over the utility’s executive remuneration.
EQT, a Swedish private equity group, said on Monday it would take a 42% stake in Kelda Holdings, the parent company of Jersey-registered Yorkshire Water, which has 5.7 million customers in Yorkshire and parts of the East Midlands and Lincolnshire.
The move will effectively make it a part-owner of Yorkshire Water, raising the stake of an existing shareholder, GIC, an investment firm, to 42%, and of TCorp, Australia’s New South Wales public sector investment vehicle, to 16%.
EQT said part of the deal would involve contributing to a £600m “inter-company loan repayment” due before March 2027, while it “fully supported” spending plans to clean up Yorkshire’s history of sewage spills.
The buyout group has already invested in four British plants that burn domestic and commercial waste to generate electricity, through a stake in waste-to-energy company Encyclis, and water treatment operations spanning the United States, the Caribbean and Latin America, according to its website.
The deal comes as Yorkshire Water faces increasing scrutiny over its environmental record and executive remuneration. Last month he was fined £700,000 for repeatedly dumping sewage into a stream.
A succession of sewage pollution incidents at Pools Brook Country Park, near Chesterfield, starting in 2018 killed fish and insects and polluted the stream for more than half a mile, the Environment Agency found in February.
And last year, The Guardian revealed that Nicola Shaw, its chief executive, had received £1.3m in previously undisclosed extra payments since 2023 through the offshore parent company.
Shaw received £660,000 from Kelda in the 2023-24 and 2024-25 financial years, and the amount of the fees was not disclosed in Yorkshire’s annual report.
That led to a government decision to close loopholes that allow water company bosses to continue receiving big bonuses despite a ban passed last year.
Bosses of companies that illegally dumped wastewater into England’s rivers and seas, including Yorkshire’s Shaw, had received millions in bonuses despite the ban. MPs have said loopholes allowed companies to get around the ban on bonuses by labeling payments differently or paying bosses through linked companies.
On Monday, Shaw described the new investment as “a big step forward.” He added: “The EQT team will bring additional expertise to our board and their support is a strong vote of confidence in our plan to improve the performance and progress we have made so far.
“EQT takes a long-term view and its team is committed to supporting the delivery of our £8.3bn investment programme.”
Kunal Koya, a partner at EQT Infrastructure, said the company was “a responsible manager of private capital” and could help “modernise” the water sector.
