Castle Water has agreed new financing facilities, which the company will use to pay water charges in advance to wholesalers including Thames Water, Scottish Water, South East Water and Portsmouth Water.

The combined £100 million agreements to include working capital facilities are for a four-year term, provided by the Bank of Scotland, HSBC and Santander.

Iolo Morris, chief finance officer at Castle Water, said: “The terms of the financing reflect our strong financial position now the water market has been operating for nearly two years.

“Castle Water has carefully managed its credit risk, with around 80 per cent of new contracts coming from the English public sector.”

John Reynolds, chief executive of Castle Water, added: “This refinancing places Castle Water in a strong position to continue expansion in the UK business water market, with a competitive cost of capital enabling us to continue to offer savings for our customers.

“With financial pressures causing problems for many other utility suppliers, it is important for our customers to know that Castle Water’s financial position is stable, that we have the financial capacity to support our strategy, with a highly credible bank group comprising Bank of Scotland, HSBC and Santander.”

A facility is a formal financial assistance programme offered by a lending organisation to help a company that requires operating capital.

Castle Water serves more than 300,000 business, charity and public sector customers across England and Scotland.

In November last year the water retailer won a second multi-million-pound public sector contract through the Crown Commercial Service  framework.

Castle Water acquired Invicta Water for an undisclosed sum last year. The move saw 50,000 business customers in South East Water’s service area transfer to the retailer in July.

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