The Court of Appeal has upheld Thames Water’s £3bn emergency bailout loan, rejecting legal challenges from environmental campaigners and a group of creditors.
In a ruling published on Monday, appeal judges dismissed arguments that the loan’s steep 9.75% interest rate was not in the public interest. The challengers had argued that temporarily nationalising the struggling utility—burdened with £19bn in debt—would be a more cost-effective solution.
The decision allows Thames Water to continue operations while working on a broader debt restructuring and attracting new investment. The company, which serves 16 million customers and employs 8,000 staff, has been teetering on the brink of collapse for months.
Under the deal, Thames Water will receive an initial £1.5bn in cash from creditors, distributed monthly, with access to an additional £1.5bn. The funding aims to sustain operations while the company appeals for permission to increase customer bills beyond the 35% cap set by industry regulator Ofwat.
Thames Water warned the court that it would run out of cash by 24 March if the emergency financing was blocked. However, the company will still need to secure billions in additional equity to stabilise its long-term finances. It recently confirmed interest from potential investors.
CEO Chris Weston welcomed the ruling, stating: “We are pleased that the Court of Appeal has decisively refused the appeals and upheld the strong High Court decision to sanction our company plan. Our focus remains on securing a stable financial future for Thames Water.”
He added that the bailout will not impact customer bills but will ensure continued investment in infrastructure, including pipe repairs and sewage treatment upgrades. “We believe a market-led solution is in the best interests of customers, UK taxpayers, and the wider economy,” Weston said.
The High Court had originally approved the bailout in February, though Judge Leech acknowledged the “eye-watering” costs of the financing.
The appeal was led by environmental campaigner and Liberal Democrat MP Charlie Maynard, alongside a group of creditors. The Court of Appeal will publish its detailed reasoning at a later date.
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