The future of European Investment Bank funding for projects in the UK water sector is “unclear” post-Brexit.

“The implications for future EIB funding is one of the key issues for water companies following the referendum result,” Water UK head of corporate affairs Neil Dhot told Utility Week.

He said the EIB had “repeatedly assured us” that it will continue to consider applications from the UK water sector now and in the two years after Article 50 is triggered. But there are some “big questions” about what will happen after.

Dhot asked whether, for example, the UK government will take out its 16 per cent share of the EIB.

“If so, what will it do with that money?” he said. “Could it be put into an albeit smaller domestic infrastructure fund for example?”

In May, the EIB announced it would lend £700 million to Tideway for its ‘super sewer’ Thames Tideway Tunnel – the largest ever loan for water investment worldwide.

Ofwat that, as far as regulated water and wastewater markets are concerned, the fundamentals remain “very much as they were and are sound”, following Brexit.

“The independent economic regulatory regime insulates the sector as it has done since privatisation from the effects of political turbulence,” chief executive Cathryn Ross said in a speech to industry delegates.

“And in any case the Brexit decision itself doesn’t prompt great changes to the legal and policy framework for the sector.”

However, she did warn that a challenge to the sector will be maintaining customer legitimacy as higher inflation, lower interest rates and lower growth hit customers but not necessarily water companies.