#1Tideway Investor Presentation January 2017#2Credit Highlights Critical UK infrastructure Strong delivery capability Supportive regulatory and contractual framework Stable and highly visible revenue profile Creditor friendly financial structure with very high liquidity Good progress on project delivery since Licence Award Financing plan substantially de-risked 2#3• Thames Tideway Tunnel • London's combined sewerage system operates at capacity London Tideway Improvements Abbey Mills River Lee Beckton Riverside Acton Crossness • • - 50-60 CSO discharges, 39 million tonnes of sewage discharged to tidal River Thames in a typical year London Tideway Improvements incorporates integrated Sewage Works Upgrades, the Lee Tunnel and Thames Tideway Tunnel Full length tunnel to maximise capture and conveyance to Beckton Thames Tideway Tunnel follows River Thames to control CSOs and minimise interference with existing infrastructure Three main tunnel drive sites ◉ Mogden Thames Tideway Tunnel EALING HAMMERSMITH AND FULHAM - 24 construction sites - 25km long - 7.2m diameter HOUNSLOW RICHMOND UPON THAMES - Between 35m and 65m deep 7 year construction Application of proven engineering with numerous comparable projects executed globally WANDSWORTH West London clay Greenwich Sewage Works Upgrades Lee Tunnel Thames Tideway Tunnel CITY OF LONDON CITY OF WESTMINSTER KENSINGTON AND CHELSEA Frogmore connection tunnel 16 17 11 Greenwich connection- tunnel LAMBETH Long Reach TOWER HAMLETS 21 22 The Limehouse Cut LEWISHAM SOUTHWARK Central London clay/Lambeth group/Thanets East Chalk Abbey Mills Pumping Station 3#4Tideway Overview • • • • • • • Following recent changes to the established UK water industry legislation, Tideway is the first project to be specified by the UK government as a large water project that should be delivered by a new company. Tideway's business as a regulated utility company is to design, build, commission and maintain the Thames Tideway Tunnel ("TTT"), a simple asset with 120 year design life Thames Water serves the area as utility provider where TTT is being constructed Tideway is responsible for investing £3.1bn of an expected aggregate £4.2bn for the TTT project with the £1.1bn balance provided by Thames Water (2014/2015 prices) Awarded design and build contracts to major contractors RPI-linked revenue collected from Thames Water's wastewater customers Fixed real WACC until 2030 Broad insurance programme in place Benefits from a support package provided by the UK Government Financing • - £1.3bn shareholder funds upfront £1.0bn revolving credit facility - £0.7bn EIB RPI index-linked loan £0.45bn forward start index-linked bonds Owned by Allianz (34.26%), Amber (21.32%), Dalmore (33.76%) and DIF (10.66%) Tideway is a new utility company regulated by Ofwat, with bespoke supportive arrangements#5Management Overview Andy Mitchell, CEO Andy Mitchell CBE FREng took the role as Tideway CEO after leaving his post as Programme Director and Board Member at Crossrail in summer 2014, where he was responsible for the agreement of the baseline schedule and budget for the project and the subsequent design and construction of the tunnels, the majority of which were finished by the time he left. Andy has managed a number of high profile projects both in the United Kingdom and overseas. After 12 years working in the United Arab Emirates, France and South Africa, and on major developments such as Hong Kong Airport and the Hong Kong West Rail, he joined Network Rail in 2001. He was Project Director for Network Rail's Southern Power Upgrade project, and was also the Senior Programme Director of the Thameslink Programme. Since his arrival at Tideway, he has taken full responsibility for all aspects of bringing into being a new regulated water company, agreeing the baseline schedule and budget and the successful launch of the Company and the agreements and delivery mechanisms that are in place today. Since Licence Award a key area of focus has been the establishment of the best possible delivery and financing arrangements. Mr Mitchell is a fellow of the Royal Academy of Engineers, a Fellow of the Institution of Civil Engineers, Chairman of the IUK Infrastructure Client Group, a visiting professor at Leeds University and has an MBA in Project Management. He was awarded the CBE for services to civil engineering. Mark Sneesby, COO Mark joined Tideway as Chief Operating Officer in May 2014. Mark is a Chartered Engineer with extensive experience in delivering major infrastructure in the water industry. He was formerly Head of Major Projects at Thames Water, which included the Lee Tunnel project, the largest contract ever awarded in the UK water industry. Mark is responsible for managing the construction of the TTT. He has also the led the implementation of the company's systems, processes and capabilities to operate as a regulated water company and a major infrastructure delivery organisation, as well as the final negotiations in the procurement of the Main Works Contractors. Mark Corben, CFO Mark joined Tideway in February 2014 from his role as Head of European Power & Utilities at UBS, where he had extensive experience in the regulated water sector and advised Thames Water on the development of the delivery model for Tideway. Over the last three years Mark has led a number of key projects for Tideway including negotiation of the Licence and Government Support Package, and establishment of controls and reporting systems of Tideway. His current responsibilities include chairing the Risk, Change, Funding and Financing and Information Systems committees. Pedro Madeira, Treasurer Pedro joined Tideway in June 2015 after leaving his role as Deputy Treasurer at Heathrow where he was responsible for leading numerous loan and capital market transactions on the airport's efforts to raise over £15bn debt since 2008. He was also responsible for looking after Heathrow's extensive derivatives portfolio. Pedro has previously worked for Shell and is a member of CIMA and the Association of Corporate Treasurers. In his current role Pedro has recruited the Treasury team, led the implementation of Treasury systems, led the negotiation of an index-linked loan with the EIB and the issuance of £450m deferred index-linked bonds. Sir Neville Simms, Chairman of the Board of Directors Sir Neville Simms FREng is a Chartered Civil Engineer. He was previously Chairman of International Power plc for ten years, until the combination of the group with the international power generation assets of GDF Suez early in 2011, at which time he became Deputy Chairman of GDF Suez Energy International. Until 2005, Sir Neville was Chairman of Carillion plc, after the demerger, in 1999, of the company from Tarmac plc, where he had worked for 35 years; including as Group CEO and Deputy Chairman for the last eight years. He was, for the final three years of the project, joint Chairman of TML, the Channel Tunnel contractor's consortium. Sir Neville has chaired a number of Construction Industry bodies and the Regional Leadership Teams for Business in the Community in the West Midlands and the Solent Region of the UK. He was a founder member of the UK Government's Private Finance Panel, Chairman of the Government's Sustainable Procurement Task Force, Deputy Chairman of Ashridge Management College, Chairman of the Building Research Establishment (BRE) Trust for ten years, member of the Presidents Committee of the CBI until 2015, and he also served for seven years on the Court of the Bank of England.#6Relevant Experience Recent London experience Lee Tunnel Creating a cleaner, healthier River Thamas Source: Thames Water Source: Crossrail 2012-2015 6.9km long and up to 84m deep (pump shaft) 7.2m internal diameter Main Contractors Contract Consortium/Contractor Value BMB JV: Bam Nuttall Limited West £421m Chalk and flints Morgan Sindall Plc Balfour Beatty Group Ltd FLO JV: Central Ferrovial Agroman UK Ltd £741m Laing O'Rourke Construction Ltd 2012-present BE Crossrail 42km (tunnelling) up to 40m deep CVB JV: Costain Limited East £605m 6.2m internal diameter Vinci Construction Grands Projets Gravels, clay, sands, silts and chalk with flints Bachy Soletanche Ltd nationalgrid 2011-present 32km and up to 60m deep 3-4m internal diameter Clay, sands, silts Source: National Grid World-class contractors with recent London tunnelling experience 6#7Business Overview - Construction Phase • Construction is progressing ahead of the baseline programme - Work has started at the main drive sites three to five months ahead of the regulatory baseline The Millennium Pier at Blackfriars was relocated and a new pier opened for riverboats to the east of Blackfriars Station ACTON STORM TANKS Clay Sands Chalk 30m (approx) WEST CARNWATH ROAD RIVERSIDE KIRTLING STREET CHAMBERS WHARF ABBEY MILLS PUMPING STATION River Thames Contractor Accepted Baseline Programme START ON SITE MOBILISATION SHAFTS TUNNELLING TUNNEL SECONDARY LINING CONSTRUCTION COMPLETION SYSTEM COMMISSIONING PERIOD HANDOVER SYSTEM ACCEPTANCE PERIOD SYSTEM ACCEPTANCE 25km (approx) CENTRAL EAST 66m (approx) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Contractors have commenced work ahead of schedule 7#8Business Overview - Commercial Strategy Tideway's commercial strategy has been designed to minimise risk to investors - Minimise reliance on any single contractor - Maximise risk transfer to contractors where efficient Effective incentivisation aligned with Tideway's objectives Key contractual framework Main Works Contracts System Integrator Contract New Engineering Contract (NEC3) Option C Target Price with Activity Schedule contract Encourages cooperation between Tideway and its contractors, and proactive risk mitigation Used successfully for Crossrail, London Olympics and Lee Tunnel Transfers key risks to the contractors (design, consents, ground conditions) Pain/gain sharing mechanism shared on a 50/50 basis, subject to adjustments for compensation events and liability caps Delay damages provisions in place Joint and several liability and step-in rights Simple, low value contract ✓ NEC3 Option E Cost Reimbursable contract Alliance Agreement Overarching framework for collaborative working between the Main Works Contractors, the System Integrator Contractor, Thames Water and Tideway Alliance Incentive Framework will incentivise early and cost efficient delivery of the investment programme ✓ Savings and opportunities to reduce some costs identified in the Optimised Contractor Involvement phase Tideway has implemented a robust and proven contractual framework 8#9REMOVE BLOCKAGES/ MATERIAL REMOVE BLOCKAGES/ MATERIAL • . • • Business Overview - Operational Phase - At System Acceptance, Tideway will transfer above-ground assets, structures and equipment to Thames Water Tideway is responsible for Inspection of the deep tunnels and shafts, generally on a ten-yearly cycle Performing any maintenance required as a result of the inspections Maintenance costs will be funded by customers through revenue provisions in the Licence Thames Tideway Tunnel operated by Thames Water in line with the London Tideway Tunnels Operating Techniques and Environmental Permits Define parameters for filling, storage and emptying of the tunnel TUNNELS MEICA & SERVICES Maintenance and operational responsibility after the System Acceptance Date ACCESS COVERS & SHAFT METALWORK ARCHITECTURE & LANDSCAPE CULVERTS & CHAMBERS RIVER WALLS & SCOUR CSO O ODOUR & VENTILATION Maintained and owed by Tideway Maintained, operated and owned by Thames Water In the operational phase Tideway's only business is the maintenance of a gravity operated tunnel 6#10Investment Programme • - - Regulatory baseline cost of £3,144m (14/15 prices) was based on management's detailed assessment of cost Direct Works of £1,855m (Main Works Contractors, System Integrator and Programme Wide) Indirects of £669m (resources, insurances, facilities, IT) Contingency of £526m Annual profile reflects regulatory baseline construction programme £m 2014/2015 prices Regulatory baseline cost, annual profile 600 500 390 400 531 519 497 407 Illustrative management build up to regulatory baseline cost 2014/2015 prices Contingency, £526m 300 266 238 200 Handover and Acceptance_ period, £94m 100 117 83 38 30 28 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Indirects, £669m Programme Wide, £63m West, £421m System East, £605m Integrator, £25m Regulatory funding baseline derived from robust bottom-up estimate Central, £741m 10#11Regulation • Tideway's Licence is based on the standard UK water and sewerage model • Bespoke enhancements reduce risk during construction • Limited potential impact of Ofwat's Water 2020 programme Subject to 5 year price control process during operational period Enhancements in Tideway's licence RCV During construction expenditure is logged up to RCV with no ex-post review Additional revenue building block for investment on a one year forward look basis Incentives ✓ Post Construction, RCV will be adjusted based on the net present value of any overspend or underspend A step down will apply to the WACC if System Acceptance happens after 28 February 2027 WACC Financing Cost Adjustment Customer Bad Debt Fixed real WACC of c.2.5% until 1st April 2030 (assuming System Acceptance by 28 February 2027) Provides partial protection against movements in the cost of debt (measured as movements in the iBoxx GBP non-financials BBB 10+) above certain thresholds Tideway is allowed to recover customer bad debt on a rolling two year basis Revenue Stream Threshold Outturn No change to revenue provision during construction Provision for funding above the Threshold Outturn (£4.1bn real) Enhanced regulatory framework set until 2030 providing more certainty than peers 11#12Government Support Package Insurer of Last Resort The Government acts as insurer of last resort The Government provides cover for insurable events above the amount the market is ready to provide Contingent Equity Support In the event of cost overruns above Threshold Outturn, the Government can be required to provide equity financing to fund the shortfall otherwise it must discontinue the project Discontinuation In certain circumstances, the Government may elect to discontinue the project and pay compensation Compensation equal to 1 x RCV (with adjustment for break costs) Market Disruption Liquidity £500m committed liquidity facility in case of market disruption Government Support Package provides strong mitigation to highly unlikely scenarios during construction 12#13Financing Strategy Maintain a low risk financing 5,000 position by preserving the Early Works Main Tunnel Baa1/BBB+ credit ratings and a strong liquidity position at all times And Drive Construction 4,500 Pre-tunnelling Project Completion and Commissioning Handover and Acceptance Period "Equity first”: £1.3bn equity (committed and backed by LCs) is 4,000 funding the investment programme to start of tunnelling 3,500 Additional liquidity from £1bn Revolving Credit Facility 3,000 Leverage only rises at the back end of construction, hand-in-hand 2,500 with progress on the delivery of the investment programme 2,000 Debt programme combining inflation linked debt to match RCV 1,500 growth with some opportunistic nominal issuance Pre-financing in order to increase liquidity where this is consistent with our overall cost of debt targets Closed £0.7bn index-linked loan with the European Investment Bank 1,000 500 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 ■Net Debt ■Adj. RCV less Net Debt Prudent financing structure with accelerated equity funding 13#14Tideway Financing Programme • • Corporate and transaction structure diagram Obligor Security Trustee Discontinuation Fixed security over shares in Holdco Creditor GSP Documents JVCo Typical WBS structure Creditors will have security over all the assets of the Holdco Group subject to usual regulatory restrictions Flexible, multi-currency platform at FinCo (Issuer) level Secretary of State/MDF Provider/ • CESA Discontinuation Agreement MDF SCA • SDA SAOA Placements can be raised at • Bank debt and Private Company level £1bn RCF in place with 6 relationship banks £0.7bn EIB term loan • All debt will be senior and rank Pari Passu Hedging Liquidity Facility Initial RCF Initial Revolving Credit Facility Agreement Facility Providers EIB Finance Contract Holdco Fixed security over shares and a "qualifying floating charge" (Holdco) plus limited security interests from the Company and TTT.Co Full security package Issuer Security Trustee Issuer/Borrower Loan Agreements Company Issuer. Bonds Liquidity Facility Hedging TTT.Co Secured group ringfence Tideway's structure is very similar to other UK regulated utility securitisations 14#15Key Financing Terms in the Common Terms Agreement • Typical WBS covenant package • Conservative end of the peer group Selected trigger events Selected trigger event consequences Financial events of default Liquidity Additional financial indebtedness Hedging policy Information covenants Financial Ratio breach: FFO ICR: 1.30x (min); 1.40x (avg) Net Debt/ RCV: 70% Loss of investment grade rating No Restricted Payment may be made by any Obligor Information provision and remedial plan Consultation on communication with regulator Failure to pay by an Obligor Financial Ratio breaches the Default Ratio (subject to equity cure right) FFO ICR: 1.10x Net Debt/ RCV: 80% Cash/liquidity facility covering minimum 18 months' interest Subject to: Compliance with hedging policy No EOD No Trigger Event caused by incremental debt Maturity concentration limits Interest rate: 70-105% limit on exposure to floating interest rates Currency: 100% hedged (less a de minimis threshold) Minimum counterparty rating at inception and on transfer only Aggregate accretion of super senior inflation hedging does not exceed 6% of RCV Compliance with further restrictions on hedging by government during construction Website Creditors' meeting once per year Compliance Certificate Investor Report Tideway has a conservative financing platform with a comprehensive suite of creditor protections 15#16Historical financial performance Tideway published its first annual report in July 2016 and half-year results to September 2016 were published in December 2016. Costs Tideway capitalises costs for assets under construction and revenue is reported as deferred income during the construction phase. At 30 September 2016, costs of £325.0m were capitalised within the asset under construction on the statement of financial position. This represents £163.8m of costs during the period and £161.2m for the prior period to 31 March 2016. • • • - - Main works costs Main works costs are split between the three regional contracts West, Central and East for the design and construction of the main tunnel, the system integrator contract and the Volker Stevin marine contract. The costs incurred in the period include contractors' staff, design, consents and preliminary costs to support mobilisation, site preparation activities at key sites across the project and also to support the "Right Start" readiness programme. Other direct costs Third party costs for the management, monitoring and mitigation of the impact of construction on third parties and safety training costs. Indirect costs The largest indirect costs are resource costs of £29.9m; other indirect costs include information systems, premises and insurance. Excluded costs Excluded costs to 30 September 2016 are £17.1m which largely reflects financing costs. Analysis of costs and cash outflows Costs £m Timing difference £m Cash outflows £m 104.1 (3.6) 100.5 42.6 1.2 43.8 Direct costs Indirect costs Total allowable costs 146.7 (2.4) 144.3 Total excluded costs 17.1 14.7 31.8 Total 163.8 12.3 176.1 Cum as of 31/03/16 161.2 Total 325.0 Allowable costs £m Main works costs 100.9 Other direct costs 3.2 Direct costs 104.1 Resources 29.9 Other indirect costs 12.7 Indirect costs Total 42.6 146.7 16#17Historical financial performance (cont.) Results . Tax • During the six month period ended 30 September 2016, Tideway reported a loss of £30.3m. We do not consider the reported loss in the period is a reflection of the performance of the business. The loss reflects the movement in the fair value in the Holdco Group's financial instruments that are recognised in the Income Statement because under IAS 23 these do not represent current borrowing costs and so, unlike our other expenditure, cannot be capitalised. A corporation tax charge of £nil was recognised in the period, which reflects the position that the Holdco Group did not have any taxable profits. Cash flow Net cash £m Balance 31/03/16 130.4 (Net) Shareholder Loans 179.7 Equity 127.7 Revenue Other Cash Inflows 14.5 2.4 324.3 Construction of the asset (163.8) • During the period, Tideway received equity and loans from its shareholders totalling £319.2m, and collected £16.9m in revenue. Working capital (12.3) • In September 2016, £11.8m of principal was repaid. Cash outflows (176.1) • Cash outflows of £176.1m includes £163.8m of investment on the construction of the tunnel and working capital outflows of £12.3m. Balance 30/09/16 278.6 17#18Credit Summary Critical UK infrastructure Strong delivery capability Supportive regulatory and contractual framework Stable and highly visible revenue profile Standalone provider of essential sewerage service Thames Tideway Tunnel supported by the Government and regulated by Ofwat Highly experienced management team World class construction contractors already on-site Proven contractual framework Established water regulatory framework Bespoke regulatory features during construction to reflect specific considerations Exceptional risks covered by the Government Support Package Capex logged up to and remunerated during construction Revenues during construction include liquidity enhancing building block ✓ Fixed real WACC until 2030 ✓ ✓ Partial protection from movements in cost of debt Protection from bad debt New Blackfriars pier Creditor friendly financial structure with very high liquidity Good progress on project delivery since Licence Award ✓ Financing plan substantially de- risked Accelerated equity funding fully LC-backed Strong liquidity with £1bn RCF Conservative leverage strategy Mobilisation of each of the three main tunnel drive sites between three and five months earlier than the original schedule Well placed to meet our target of handing over the Thames Tideway Tunnel to Thames Water to operate earlier than the baseline date No major injuries to date Our financing plan has been significantly de-risked with £1.15bn of debt capital raised in 2016 ✓ As of 30 September 2016, our liquidity horizon was to 2022 Chambers Wharf sites offices delivered by river LLYNC Excavation of first shaft started at Kirtling Street 18#19APPENDICES 19 19#20Tideway delivery model DEFRA Main Works Contractors Government Support Package Main Works Contracts Financing Documents OFWAT Licence Infrastructure Provider O&M Agreement Revenue Agreement Interface Agreement PMC Contract Insurance Policies Lenders Insurers TWUL CH2M 20 20#21Tideway corporate structure Amber-related entities Allianz INPP Swiss Life Dalmore DIF 34.26% 15.99% 5.33% 33.76% 10.66% Shareholder Loans | Equity Bazalgette Equity Ltd 100% Bazalgette Ventures Ltd 100% Shareholder Loans Bazalgette Holdings Ltd Bonds Bazalgette Finance plc Proceeds Shareholder Loans Bazalgette Tunnel Ltd TTT Co Security Group Bank debt 21 21#22Tideway's Shareholders Allianz AMBER Allianz Capital Partners is the Allianz Group's in-house investment manager for alternative equity investments. With offices in Munich, London, New York and Singapore Allianz Capital Partners manages more than EUR 14 billion of alternative assets. The investment focus is on direct investments in infrastructure and renewable energy as well as private equity fund investments. ACP's investment strategy is targeted to generate attractive, long-term and stable returns while diversifying the overall investment portfolio for the Allianz Group insurance companies Amber is a leading international sponsor and manager of infrastructure focussed on long-term, lower risk, cash flow generative investments. Amber has a long standing international reputation in the origination, development and management of specialist infrastructure. With over 80 executives throughout the world, Amber has one of the strongest experienced teams of public infrastructure professionals. The Amber team is currently providing management services in respect of more than 100 infrastructure projects in eight countries. Amber, through Amber Fund Management Limited, provides fund management services to INPP. INPP was established by the Amber team in 2006, in response to the lack of opportunity for retail investors to invest in community infrastructure projects and take advantage of the growth of the infrastructure investment market. INPP seeks to provide its shareholders with both a long-term government-backed yield and capital growth through investment across both construction and operational projects. DAL MORE CAPITAL DIF Dalmore Capital Limited (Dalmore) is an independent fund management company focusing on opportunities for institutional investors in low volatility assets in the infrastructure sector. The firm was formed in 2009 by Michael Ryan, John McDonagh and Alistair Ray, each of whom has significant experience in making and managing UK infrastructure investments and who have worked together in previous firms for many years. The firm currently has 23 investment staff and 9 finance and support staff and the team has collective infrastructure experience of over 250 years. Dalmore has raised and manages over £1.7 billion for institutional investors in discretionary managed funds, co-investment and single asset transactions and has made investments into over 90 UK infrastructure assets. Dalmore raised £440m from UK pension funds and other long-term investors to bid for and invest in the Tideway project. DIF is a leading independent fund management company, with ca. € 3.1 billion under its management. Through five investment funds, DIF invests in high-quality infrastructure assets that generate long-term and stable cash-flows, including Public Private Partnership projects (PPP/PFI/P3), renewable energy projects and other core infrastructure projects in Europe, North America and Australia. DIF has a team of over 50 professionals located across its offices in Amsterdam (Schiphol), Paris, Frankfurt, London, Madrid, Luxembourg, Toronto and Sydney, providing it with access to the growing number of investment opportunities across Europe, North America and Australia. By being located in or close to its target markets, DIF can originate and manage investments efficiently. DIF has invested in and manages more than 130 infrastructure and renewable energy projects, with a total asset value of more than €20 billion. 22 22#23Bazalgette Tunnel Limited - Credit Ratings MOODY'S Baal (stable) 1 June 2016 - "The construction counterparties are well-known international contractors with significant experience of complex projects including, in London, Crossrail, the Lee tunnel (which will connect to the main TTT asset) and the Northern Line extension works." "The availability of three construction consortia provides significant protection in a contractor replacement scenario, as other experienced contractors will be on site and familiar with the project, reducing the time and cost to find a replacement." "Comprehensive government support package mitigates key construction risks, primarily by ensuring that sufficient funding will likely remain available in the event of cost overrun and/or delay scenarios. It will also compensate senior debt if construction is not completed." "Strong regulatory framework (albeit with some novel and untested features), overseen by Ofwat, which has an established track record in excess of 20 years for transparently regulating the water and sewerage companies in England and Wales." "Unlike most projects, BTL benefits from significant income during the construction phase. The licence provides for revenues on the basis of a return allowed on forward-looking capex up to the so-called threshold outturn amount." "Once operational, BTL will exhibit a similar risk profile to existing UK water and sewerage companies." " "Covenanted financing structure provides additional creditor protection." "Shareholders' commitment to provide equity and shareholder loan notes of around £1.274 billion upfront provides significant funding at the initial stages of the project." Fitch Ratings BBB+ (stable)- 5 August 2016 "The ratings reflect the substantial protection afforded to the construction of the Thames Tideway Tunnel (TTT, the project) by a supportive, transparent and largely proven regulatory regime and strong support commitments from the UK government against completion and funding risk during construction. Furthermore, the ratings reflect the experience of the parties involved in the project's construction, achievable cost and schedule targets, and Fitch's view that once it is commissioned, the project's operational risk profile will be low." "The project's construction is inherently complex and lengthy. However, in Fitch's opinion, completion risk is well managed and mitigated thanks to the project's detailed planning, the involvement of several experienced contractors and personnel, a supportive regulatory framework under Ofwat's supervision and a strong support package from the UK government, which aims at providing liquidity and additional equity should severe stress scenarios materialise. Consequently, completion risk does not constrain the rating" "The revenue structure is based on the well-established approach used for the UK water sector and regulated by Ofwat, subject to the adjustments for the construction period. The issuer will not be exposed to volume risk, but will have exposure to tariff risk every five years during operations. The company earns a return on capital on its regulated capital value (RCV) and is able to recover depreciation, tax and allowable opex. The RCV will increase with inflation" "The project has very low operating risk as the tunnel uses proven technology, relies on gravity to transfer the sewage and has few moving parts. The main operating responsibilities of the project company are 10 year reviews of tunnel condition" "The company has already proven its ability to access capital markets through the recent successful issuance of GBP350m delayed-draw, index-linked bonds. Market access risk during construction is comprehensively mitigated by several features, such as the receipt of revenues as construction works progress, the covenants requiring capex and debt service liquidity covering 12 months, committed liquidity support from the government in the event of debt market disruption during construction and, upon commencement of operation, WACC adjustment for changes in debt costs during construction" 〃 23 23#24Ongoing Debt Investor Relations • Website • • Creditors' meeting once per year Compliance Certificate Investor Report VCDW JOUS THE HOME TUNNEL ABOUT US Home About us Investor Centre SEARCH NEWS OUR COMMUNITY Tideway HELP & ADVICE • Share this page on INVESTOR CENTRE Welcome to Tideway's Investor Centre The Investor Centre contains information on Tonway's corporate structure, creating acet act reports, pots and acces and rancal calendar. Its med al creditors deci investors, ratna agendes, creck analysts and other parties with an interest in Tideway's financial performance and dobanding INVESTOR DIGEST Quick access to the latest highlights and key investor information INVESTOR CONTACTS FINANCIAL CALENDAN OUR DELIVERY MODEL OUR REGULATION SHAREHOLDERS CORPORATE STRUCTURE CREDIT RATINGS T Tideway REPORTS & ACCOUNTS INVESTOR REPORTS AND PRESENTATIONS Fitch Ratings DEBT INFORMATION steas ... Register for quateny updat Follow us on Attor The tunnel am -D Cruncheras About us -PALY O Hend - Busin Trix News Our community - - -Z & Tko Fur & Dana pe Company under 19553573 Reg Tane Unted. The Port 37 Not Whanaad Podge, London W21AF ned in England and wicks Help & advice -Loumentary -odes inven Cooke T Tideway Terms atuse I Pracy Language Tideway is committed to keep investors updated on business developments through a dedicated team 24 24#25Disclaimer CONFIDENTIAL By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations. This presentation (together with any other information discussed verbally during the meeting where this presentation is made, the "Presentation") has been prepared by Bazalgette Tunnel Limited (the "Company") solely for the benefit and use of the original recipient. The Presentation is confidential and is being provided to you solely for your information and may not be retransmitted or further distributed to any other person or published, in whole or in part, by any medium or in any form for any purpose. 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The Presentation is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). Any investment activity will only be available to, and any invitation, offer, or agreement to engage in any such investment activity will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on the Presentation or any of its contents. The information in the Presentation is given in confidence and the recipients of the Presentation should not engage in any behaviour in relation to financial instruments (as defined in the Market Abuse Regulation (Regulation (EU) No 596/2014) ("MAR")) which would or might amount to market abuse for the purposes of MAR. The securities of the Company have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered or sold, directly or indirectly, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. The Company has not made, and does not intend to make, any public offering of securities in the United States. The availability or distribution of the Presentation in certain jurisdictions may be restricted by law and persons into whose possession the Presentation comes should inform themselves about, and observe, any such restrictions. Any failure to comply with any such restrictions may constitute a violation of applicable law. 25