About the Innovation in Water Challenge

The winners of the first round of the Innovation in Water Challenge (IWC) have been announced on 21 April 2021.

The primary objective of the first IWC is to encourage new ways of working that go beyond business-as-usual innovation practices in the water sector, in particular, increasing and improving collaboration and building partnerships from within and outside the water sector.

Through the IWC, we’re looking for initiatives that water companies would not otherwise be able to explore or invest in.

We’re looking for all types of projects – be they technology, culture, business practices, commercial models or something else. Initiatives can be at any stage, as can the technologies, practices and models that you may use within them.

The IWC is a chance for you to create new initiatives and partnerships that you’ve never previously found the opportunity to explore. We have assembled a panel of expert judges to help Ofwat select a diverse portfolio of promising innovations to receive funding.

We’ve pulled together the key information you need to enter including information about:


All this information is available in the Entrant handbook (PDF, 1 MB), if you would prefer to review this information in one document.

A second round of the IWC is expected to open in November 2021, with more information about this round available at a later date. We are continuing to listen and learn as we develop the water innovation challenges, and future challenge rounds may be designed differently.

Round one timeline

Entries to round one of the IWC opened on 18 January and closed on 26 February 2021 at 12 noon (GMT). The judges convened in March 2021 to recommend which entries should receive funding, and winners were announced on 21 April 2021.

What you can win

There is £2 million available to fund innovative projects, depending on the quality of entries submitted. Entrants should bid for between £50,000 to £250,000 per entry. In exceptional circumstances, the judging panel may recommend that more than £2 million is awarded from the Innovation Fund.

The judges will consider how best to allocate funding based on the entries received. We hope to award between 10 and 15 prizes for varying amounts for the first round of the IWC.

What we are looking for

Areas for innovation

Innovation is not just about the development of new technologies – it can mean setting up new processes or systems to support activities; or collaborating in new ways.

We are looking for your ideas that address the big challenges facing the water sector – guided by Ofwat’s five strategic innovation themes, innovation principles and the objectives of the UK and Welsh governments. We aim to fund a wide range of entries that will showcase a diverse mix of innovative ways of working and solutions.

Ofwat’s five strategic innovation themes are:

  1. Responding and adapting to climate change, including how to meet the sector’s ambition of net-zero emissions.
  2. Restoring and improving the ecological status of our water environments, protecting current and future customers from the impacts of extreme weather and pollution.
  3. Understanding long-term operational resilience and infrastructure risks to customers and the environment, finding solutions to mitigate these in sustainable and efficient ways.
  4. Testing new ways of conducting core activities to deliver wider public value.
  5. Exploring the opportunities associated with open data, stimulating innovation and collaboration, for example, encouraging new business models and service offerings that benefit customers, including those in vulnerable circumstances.

We have worked with Ofwat to identify a number of innovation enablers that will be particularly critical to growing the water sector’s capacity. The Fund will support initiatives that demonstrate and further strengthen these enablers, including:

  • Collaboration: Building and strengthening collaboration and partnerships across companies, the supply chain and outside the water sector.
  • Openness: to sharing data, insights and ideas within the water sector and between the water and other sectors.
  • Adaptability: openness to trying out new ways of working.
  • Managing innovation risk: including through greater use of experimentation.
  • Scalability & Deployability: improving the ease of scaling proven innovations within the sector.
  • Long-term perspective: taking both a longer-term and broader perspective on value creation.

Assessment criteria

The assessment criteria that will be used to select successful entries, along with the questions you will be asked to answer against these criteria are available on the Assessment criteria page. All three criteria will be weighted equally.

When completing your application form, please cite the best available evidence to back up your claims, wherever applicable. You may include hyperlinks in your application form.

Who can be involved


The lead applicant 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, but they can partner or form a group with any organisation to enter.

All entries must include a minimum of 10% financial contribution, to ensure customers do not bear all the risk of initiatives funded through the Challenge and to encourage good project management. We encourage this to be a direct financial contribution by the water companies but are flexible for it to come through commercial partnerships or other funding sources (not including other sources of customer contributions, e.g. Green Recovery Fund). Any additional contributions, beyond the 10% minimum financial contribution will be considered favourably during the assessment of entries.

You can submit as many entries into the Challenge as you like, providing each entry is for a different initiative. It is unlikely, however, that the judging panel will award funding to more than three entries with the same lead applicant.


We particularly encourage entries which involve partnerships and collaboration between water companies, NAVs, as well as with organisations in the water sector supply chain and beyond, including but not limited to suppliers, water retail suppliers, academia, start-ups and small-to-medium enterprises (SMEs).

  • If you are a water company or a NAV – you are strongly encouraged 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 – including supply chain partners, new start-ups, SMEs, academia, local authorities, water companies outside of England and Wales, and water retailers. Please note that it’s your responsibility to carry out any checks and due diligence on partners.
  • If you are not a water company or a NAV – the IWC is an opportunity to reach out to one or more water companies to explore the possibility of working together. If you are new to the water sector, you may wish to email contact@waterinnovation2050.org.uk
    to get in contact with a water company 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 that can be contacted to explore new partnership opportunities can be found on the Find a partner page.

How to enter

The application form

All entries must be submitted by 26 February 2021 at 12 noon (GMT) using the online application form available here. The water company, leading any partnership or consortia, will need to submit this form.

Before submitting your entry, please ensure that:

  • You have read and understood the Challenge Terms and Conditions and Privacy Policy.
  • Your application is aligned with one or more of the five Ofwat strategic innovation themes.
  • You have followed good procurement principles, performed your due diligence on your partners and accept any risk and liability from going ahead with them.
  • The 10% minimum financial contribution towards projects costs is part of the proposal (at least 10% of total project costs will be funded from sources other than the Ofwat Innovation Fund).

The application questions are available in this document to help you to develop and collaborate on your answers ahead of completing the online version.

We are aiming to make sure the application process is as efficient and practical as possible, ensuring ease of access for organisations, in particular smaller companies.

Reasonable adjustments and accommodations

We are committed to enabling a diverse range of entrants to enter the Challenge. If there are any reasonable adjustments that would support you to enter, catering for any additional needs you may have, please contact waterinnovation@nesta.org.uk. Unfortunately, no time extensions will be possible in this round of the IWC.

Requirements for successful entries

All participants in the IWC will be required to adhere to the full Terms and Conditions of participation. Please ensure you have read and understood these before submitting your entry. If selected as a winner, you will be required to sign a further agreement which will outline arrangements for monitoring and reporting based on your specific project proposal.

In particular, the key requirements of winners will include:

  • Use of funding: Any funds awarded by the Challenge must only be used to fund the project described in your application which must promote the objectives of the Challenge as described on the Challenge website.
  • 10% contribution: All entries must include a minimum of 10% financial contribution, to ensure customers do not bear all the risk of initiatives funded through the Challenge and to encourage good project management. Additional financial contributions can be made on top of the maximum amount available from the Fund (£250,000).
  • Monitoring and reporting: We will need to monitor your progress – this may be through meetings, surveys, written reporting or other reasonable requests for information. We will endeavour to keep this reporting light touch and proportionate to the relative size and risk of your projects.
  • Intellectual property rights (IPR): You should retain all rights in and to your background IPR, including where a bid involves more than one participant. However, an appropriate form of licence should be granted to all participants in any project, which is the subject of a bid, for the sole purpose of the project, in order to enable it to go ahead.
  • Publicity: We may use the names of the winning organisations and summaries of their proposals in publicity materials for the IWC. We also ask that you acknowledge our support in any public statements about the project.
  • Conflicts of interest: You (and any partners you work with) must take reasonable steps to avoid any conflicts of interest with Ofwat, Nesta or any of our delivery partners and judges. Immediately inform Nesta if you become aware of any potential or actual conflict of interest and provide Nesta and Ofwat with all information reasonably requested in respect of such conflict.
  • Settlement Arrangement: Payment of funds awarded through the Challenge will be settled through the mechanism agreed by the Water Companies that are funding the Challenge. Funding will be awarded in pounds sterling, and the recipient is responsible for payment of tax and other charges.

Setting you up for success

To see all the information about the IWC please review the Entrant handbook, and if you have questions please review the Frequently asked questions. If you still have questions, please email us at waterinnovation@nesta.org.uk.

Further details of events, including webinars, partnership brokerage sessions and recordings of these sessions will be updated regularly on the News & views page. For example, you can view the recording of the webinar on the 16 December about the IWC, together with a transcript of the session.

If you have further questions or would like to clarify any guidance we have published, One-to-One Surgeries are available on Thursdays. Please sign up to a session on Eventbrite.

We will be reaching out to the water sector and beyond to explore what further support will be valuable. Please contact waterinnovation@nesta.org.uk if you have any ideas or questions on support.