Response to Ofwat's Proposals to Modify Licences

Affinity Water Finance (2004) Limited

(formerly Affinity Water Finance (2004) PLC, Veolia Water Central Finance PLC

and Three Valleys Water Finance PLC)

5.7/8% Guaranteed Notes due 2006 (the "Notes")

17 January 2013

Ofwat's Proposals to Modify Water Companies' Licences

On 21 December 2013 Ofwat issued a notice under section 13 of the Water Industry Act 1991 (the "Section 13 Notice"), proposing modifications to water companies' licences which, if implemented, would allow for changes to be made by Ofwat to the way in which price controls are set.

Affinity Water Limited, the guarantor in relation to the Notes, has responded to the Section 13 Notice on 16 January 2013, stating that it accepted the proposed modifications to its licence.

It is expected that Ofwat will now make modifications to the licence of Affinity Water Limited tailored to the current conditions of that licence reflecting the provisions of the Section 13 Notice.

For further information, please contact:

[email protected]

Tim Monod, Company Secretary

Affinity Water Finance (2004) Limited

Tamblin Way

Hatfield

Hertfordshire

AL10 9EZ

Phone: +44 1707277196

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