Funding flows well for Glas Cymru
On January 30, UK water regulator Philip Fletcher finally gave the go-ahead to Glas Cymru's purchase of the assets of Welsh Water, in exchange for assuming £1.8 billion of the debt of Welsh Water's owner, utilities group Hyder. Glas Cymru - "the people's company" is to have what amounts to mutual status and become fully debt financed. Technically, it will be owned by nobody but guaranteed by 200 members - ranging from Welsh dignitaries to hospitals - whose individual personal liability will be capped at £1.
Fletcher's decision had been eagerly awaited by other water companies, several of which are keen to restructure on similar lines - a scheme to create a fully debt-financed company put forward by Kelda, the owner of Yorkshire Water, was blocked by the regulator last year.
The Glas financing uses various instruments that other water companies are likely to pick up on.