Water Breakthrough Challenge

Driving wide-scale transformational change in the water sector

Part of the Ofwat Innovation Fund, a £200 million fund to grow the water sector’s capacity to innovate, enabling it to better meet the evolving needs of customers, society and the environment in England and Wales. Read more about the Innovation in Water Challenge.

The Breakthrough Challenge is the second competition funded through the Ofwat Innovation Fund. It provides an opportunity for water companies, in partnership with other organisations, to receive funding for innovative initiatives that go beyond business as usual to deliver tangible benefits for customers, society and the environment. 

Run by Ofwat and Nesta Challenges, supported by Arup, the Water Breakthrough Challenge is funded through Ofwat’s £200 million Innovation Fund, as part of the regulator’s goal to create an innovative and collaborative water sector that meets the needs of customers, society and the environment in the years to come.

The Breakthrough Challenge aims to encourage collaborative innovative initiatives that help tackle the biggest challenges facing the water and wastewater services, such as achieving net zero, protecting natural ecosystems and reducing leakage, as well as taking opportunities to use open data and deliver value to society. It’s for initiatives that water companies would otherwise be unable to invest in or explore – and may exist in other sectors of our economy or worldwide. This might include, for example: trialing new technology, commercial models, ways of working or business practices.

The Challenges is now open to first stage entries

The first round of the Breakthrough Challenge is now open for entries led by water companies, including new entrant water companies (NAVs)Individual entries to the Breakthrough Challenge can bid for between £1 million to £10 million from the Innovation Fund. The team is to considering smaller value bids from small water companies (including NAVs) – please contact the team to explore this option further if this would be relevant for you.

Read more about the Challenge

Individual entries to the Water Breakthrough Challenge can bid for funding between £1 million and £10 million.  

We are open to considering smaller value bids from small water companies (including NAVs) – please contact the team to explore this option further if this would be relevant for you.  

The judges will consider how best to allocate the £40 million funding based on the entries received, to develop a diverse portfolio of funded projects, with Ofwat making the final decision.

Details about Entries  

We are seeking truly innovative entries and recognise that these present both risks and opportunities.  

To help manage these, entrants will be expected to consider realistic, meaningful project milestones which will be referred to in determining:   

  • monitoring for winning entries;  
  • delivery milestones associated with drawdown of funds; and / or 
  • milestones to consider scope changes to enable the intended impact to be realised  

We will provide more detail and examples in the entrant materials available at launch on 6 May 2021.

Assessment information 

Entries to the Water Breakthrough Challenge will be assessed by assessors and the judging panel against criteria grouped into the following three broad categories:  

  1. Positive impact for water customers, society, and the environment 
  2. Innovation enablers and innovative solutions 
  3. Capacity, capability and commitment to deliver 

We will publish the detailed assessment criteria within these categories and guidance for assessors and the judging panel at the beginning of the Stage 1 entry period on 6 May 2021.

We have set out below: 

  • our expectations for what successful entries to the Challenge will need to evidence;
  • key considerations that the assessors and judging panel will take into account in assessing entries to the Challenge.


The lead entrant to the Water Breakthrough Challenge must be one of the 17 licensed regional water only and water and wastewater companies or new entrant water and wastewater companies (NAVs) in England and Wales. We strongly encourage lead entrants to enter the Challenge in partnership or consortia.

We are hoping to receive a wide range of entries that will showcase a diverse mix of innovative ways of working and solutions. In comparison to the Innovation in Water Challenge, we are looking for largerscale projects which can deliver a significant and tangible impact towards one or more needs for customers, society and the environment. This is reflected in the more substantial funding on offer to successful entrants.

For this round of the Water Breakthrough Challenge, we are restricting direct access to water companies. We have committed to keeping eligibility under review and will continue to assess the risks and benefits of broadening out eligibility in future rounds.

Intellectual property rights (IPR)

The policy on IPR for the Breakthrough Challenge remains in line with that set out in the first Innovation in Water Challenge terms and conditions. We will publish detailed IPR terms on 6 May, as part of the Breakthrough Challenge terms and conditions.

The Breakthrough Challenge entry form will ask entrants how they will meet the IPR requirements.

Where entrants request an alternative IPR arrangement, we expect entrants to confirm how any alternative IPR arrangements will have positive impacts for all water customers, society and the environment, including in relation to value for money. We will consider these requests on a case-by-case basis.

To understand how the IPR rules may apply in practice, you can read this blog.

Financial Requirements 

We expect entries to demonstrate cost efficiency and good use of customer money, with a clear case for any costs included in the entry budget. Further details will be available on 6 May 2021.

We expect entry partners to make a minimum 10% financial contribution to Breakthrough Challenge entries. Customers should not bear all the risk of initiatives funded through the competition; this is also to ensure strong project management.

The Breakthrough Challenge will cover up to 90% of each project’s total costs. Entry partners have the flexibility to decide how the remaining 10% is funded, as long as it is not funded by charges to water customers in England and Wales.

  • Water company contributions will be monitored through the application and monitoring process and Ofwat’s Regulatory Accounting Guidelines tables – Table 9A, column 7.
  • If entering as part of a group or consortium, it is up to entry partners how they wish to divide this 10% contribution. There is no requirement for it to be shared equally. Entry partners may also consider how they could bring funding from other sources.

In the entry form we will require the entrants to specify the source of funds for their contributions. We welcome any additional financial and/or non-financial contributions beyond the minimum 10%, which will be considered favourably during the assessment of entries.

We are open to projects which have been successful in other funds and already have additional funding. For example:

  • organisational investment
  • public or private funding

However, entrants must confirm that there is no duplicative or double funding.

The entrant(s) will also need to confirm that they are not restricted by their current funding source when applying for additional and alternative funding through this Fund.


We encourage both water companies and third parties to actively establish new partnerships to enter the Challenge. Partners of water companies do not need to be based in England and Wales.

Water companies can enter in partnership with organisations within and outside the water sector. For example:

  • academia
  • water retailers
  • start-ups
  • small businesses 
  • across sectors such as energy, manufacturing, health or financial services.

Further information to facilitate partnership building will be available soon, including any networking and brokerage events to support networking and collaboration.

  • If you are a water company – We strongly encourage you to explore opportunities for new partnerships and consortia, including by signalling opportunities for partnerships on your website and social media channels.  You can partner with anyone you wish. However, please note that it’s your responsibility to carry out any checks and due diligence on partners. 
  • If you are not a water company – We encourage you to see the Breakthrough Challenge, and future competitions, as an opportunity to explore the possibility of working in partnership with one or more water companiesIf you are new to the water sector, you may wish to email contact@waterinnovation2050.org.uk to get in contact with the 17 licensed regional water only and water and wastewater companies about your innovative idea or solution. This central inbox is managed by an alliance of 19 UK water companies. A full list of England and Wales water companies, including NAVS, that can be contacted to explore new partnership opportunities can be found on the Find a partner page

We recognise that it takes time to forge good relationships, so we encourage you to plan early and have an eye on future competition rounds.

We recommend that you do not wait for a competition to open to start developing relationships to ensure sufficient time is allowed to nurture relationships and hone ideas.


Timeline (click and drag items to the right to view more)

6 May 2021

Stage 1 Screening

The first stage for entries will open on Thursday 6 May 2021, 09:00 (GMT) and close it on Thursday 3 June at 12 noon (GMT).

The Stage Screening assessment will consider how well entries meet the first two categories of the assessment criteria.

28 June 2021

Stage 2 Full Entry

The second stage to invited entries will open on Monday 28 June 2021 at 9:00 (GMT) and close it on Friday 30 July at 12 noon (GMT). 

Stage 2 Full Entry process will consist of a more detailed assessment of proposals against each of the three broad assessment categories.

How to enter

The online entry form for Stage 1 is now available.

The lead entrant water company, leading any partnership or consortia, will need to complete and submit this form. As a guide, we would not expect it to take you more than two days to complete the first stage entry form.

The entry form for Stage 2 will be published on 6 May to allow for drafting of entries from the beginning of the entry period.

We are aiming to ensure that the entry process is as efficient and practical as possible. We want to ensure access is easy for all organisations, particularly smaller companies.

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