Group Refinancing

Northumbrian Water Group PLC
11 May 2004


                                                                     11 May 2004

                 NORTHUMBRIAN WATER ANNOUNCES GROUP REFINANCING


Northumbrian Water Group plc (the Group) announces that Northumbrian Water 
Limited (Northumbrian Water), the Group's water and waste water subsidiary, has 
completed the securitisation of the cash flows received from the Environment
Agency in respect of its Kielder operating agreement. The net proceeds of 
£212.1 million will be used to refinance the remaining short-term debt advanced 
at the time of the Group's flotation last May. The transaction does not have any 
impact on either the ownership or operation of the Kielder scheme.

In addition, the European Investment Bank (EIB) has reviewed the terms of its 
facilities with Northumbrian Water in the context of the recent credit rating 
reviews of that company by Fitch (BBB+, stable outlook), Moody's (Baa1, stable 
outlook) and Standard & Poor's (BBB, positive outlook). As a consequence, the 
existing EIB loans will remain in place and the Group is now in a position to 
cancel the remainder of the back-up facilities put in place at the time of the 
acquisition.

Group Finance Director, Chris Green, said: "We are very pleased to announce the 
successful completion of the Kielder securitisation. Proceeds from the 
transaction will be used to refinance the remaining short term debt acquired at 
the time of the Group's flotation in May 2003. This transaction, together with 
the EIB decision, significantly strengthens the debt profile of the Group ahead 
of the next regulatory period."

Enquiries:
Finsbury [phone]
Rollo Head
Mark Harris


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