On 24th August, Ofwat awarded the licence for Thames Tideway Tunnel to the consortium Bazalgette Tunnel Limited. More details on the Ofwat announcement can be accessed here.
As part of the announcement, Ofwat stated the cost of capital that will apply during the construction period of the project (the “bid WACC”) will be 2.497%.
CEPA has developed a short briefing note which begins to analyse this data point and what it might imply with respect to the cost of equity. The CEPA briefing note can be found here.