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Ofwat established a £200 million Innovation Fund to help the England and Wales water sector to grow its capacity to innovate and enable it to better meet the evolving needs of customers, society and the environment. The fund has so far run two competitions - with more to follow up to 2025. We announced the winners of the first round of the first competition - the Innovation in Water Challenge - on 21 April 2021. We announced the winners of the Water Breakthrough Challenge 1 competition on 30 September 2021. This document sets out the payments between water companies to pay the funds awarded through both competitions.