RD 08/07: Interest rates for requisitions and infrastructure charges

RD 08/07: Interest rates for requisitions and infrastructure charges - Six monthly review

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Ofwat home > Publications > Letters to Regulatory Directors

RD 08/07

TO THE REGULATORY DIRECTORS OF ALL
WATER AND SEWERAGE COMPANIES AND
WATER COMPANIES

24 April 2007

Dear Regulatory Director

INTEREST RATES FOR REQUISITIONS AND INFRASTRUCTURE CHARGES –
SIX MONTHLY REVIEW

We set out the basis on which Ofwat approves interest rates for requisitions and infrastructure charges in a letter to companies on 9 April 1990 (FD4).

The latest published value of the reference rate (10 year gross redemption gilt yield) is 4.82% (March 2007). The rates that companies must adopt from 30 April 2007 will therefore change from those set out in my letter of 3 November 2006 (RD 18/06). They are, for borrowing, 6.25% (water and sewerage companies) or 6.50% (water only companies) and, for deposits, 4.00%.

Any queries on the content of this letter should be addressed to Samuel Okyere on 0121 625 1485.

I am copying this letter to Richard Wood (DEFRA), Matthew Quinn (Welsh Assembly Government) and Pamela Taylor (Water UK).

Yours sincerely

Paul Hope
Head of Tariffs

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