Canada's Export Agency Loses Money Lending to Thames Water
- Canadian export agency has incurred losses after lending $1bn to Thames Water.
- State-backed body EDC sold loans made to debt-ridden UK utility at a deep discount.
- This indicates a financial setback for the Canadian government's export initiatives.
Canada's Export Development Canada (EDC), a state-backed export credit agency, is reportedly facing significant financial losses after extending loans to the struggling British utility, Thames Water. The agency has provided up to one billion Canadian dollars in loans to Thames Water between 2018 and 2022, following investments from the Canadian pension fund Omers. Thames Water has recently warned that it could run out of cash by June 2024, exacerbated by years of mounting debt from various owners. The situation for Thames Water has deteriorated, leading to regulatory oversight from an independent monitor after the utility lost its investment-grade credit rating, violating its licensing conditions. EDC has confirmed that it issued five loans to Thames Water, including two in 2022, but has not disclosed the exact amounts, estimating the total between C$750 million and C$1.45 billion. In recent months, EDC has reportedly sold loans exceeding £600 million, with some transactions coinciding with the financing of Thames Water. While EDC has not confirmed any losses, a spokesperson indicated that the agency is closely monitoring the challenges faced by Thames Water and is evaluating its loan exposure in light of the utility's difficulties and Omers' decision to write down its stake. Thames Water has refrained from commenting on the situation, while EDC highlighted its role in facilitating connections between Thames Water and Canadian companies, particularly in the cleantech sector.