The seventh Water Breakthrough Challenge has launched with up to £50 million available to support collaborative projects tackling some of the water sector’s most pressing environmental and operational challenges.
Funded through Ofwat’s Water Innovation Fund, the latest competition is inviting water companies, universities, technology businesses, charities, engineering firms and other organisations to develop innovative solutions that improve water resilience, protect the environment and strengthen infrastructure across England and Wales.
The funding comes as the sector faces growing pressure from drought, climate change, pollution and increasing demands on water resources, with regulators encouraging earlier intervention and greater collaboration across the industry.
Funding innovation to tackle water sector challenges
Water Breakthrough Challenge 7 will distribute up to £50 million through two funding streams designed to support projects at different stages of development.
The Catalyst stream will provide awards ranging from £150,000 to £2 million for collaborative partnerships developing innovative solutions. The larger Transform stream will offer between £2 million and £10 million for projects capable of delivering significant sector-wide impact.
Applications are open to partnerships led by licensed water companies in England or Wales, working alongside organisations from across academia, industry, technology and the environmental sector.
Addressing drought, pollution and water resilience
The latest challenge has been launched as the water sector responds to increasingly complex pressures, including prolonged drought, the need to reduce storm overflows, improve river health and address emerging contaminants such as PFAS.
Other priorities include reducing leakage, encouraging more efficient water use, protecting natural ecosystems and supporting the transition towards a net zero water sector.
Dr Jo Jolly, Ofwat’s Director for Natural Assets, Environment and Innovation, said the environmental pressures experienced during 2026 demonstrated the need for greater innovation across the industry.
“The record-breaking heat and widespread droughts of summer 2026 are not anomalies. They are a warning of the future arriving faster and harder than expected.
“No single organisation can solve these challenges alone. The breakthroughs we need will come from radical collaboration across sectors, bringing together expertise, technology, investment and the power of nature itself.”
Building on previous innovation successes
Since the Water Innovation Fund launched in 2020, £251 million has been awarded to 156 projects involving 354 partner organisations.
According to Ofwat, around 65% of the funding has been awarded to organisations outside the water sector, including universities, charities, engineering companies, technology firms and other businesses.
Previous Water Breakthrough Challenge projects have delivered innovations ranging from nature-based “water batteries” that store excess water on farmland before releasing it into rivers during drought, to the Stream open data platform, which supports near real-time monitoring of sewage overflows across England and Wales.
Collaboration at the heart of innovation
The Water Innovation Fund is intended to encourage organisations from different sectors to work together on practical solutions that improve environmental outcomes while delivering benefits for customers and communities.
Projects funded through previous competitions have also explored citizen science initiatives, river restoration, artificial intelligence, chalk stream protection and new approaches to removing pollutants from waterways.
Water Breakthrough Challenge 7 is being delivered by Challenge Works, part of Nesta, in partnership with Arup and Isle, on behalf of Ofwat.
Successful projects are expected to be announced in May 2027.
