International Public Partnerships (INPP) has distanced itself from the crisis engulfing Britain’s biggest water supplier, Thames Water, saying the Thames Tideway Tunnel in which it is invested is a separate company.

Thames Water, which provides drinking water and waste-water services to 15 million customers in London and the South East, said on Wednesday it needs to raise more cash from investors as it struggles to service its £14bn debt pile.

That came a day after chief executive Sarah Bentley resigned after less than three years in the role. She was in the second year of an eight-year turnaround plan to address aging infrastructure, tackle leakage and reduce pollution in rivers – a legacy of underinvestment.

INPP, the £3bn social infrastructure investor, owns around 18% of the Tideway project, which is integral to reducing the untreated sewage discharged into the river Thames and is a key priority for local authorities. The investment commanded 13.5% of INPP’s portfolio at the end of last year.

Yesterday, the fund moved to reassure investors, saying that although Thames Water has a licence to collect Tideway’s revenues from its customers and pass them to Tideway, statutory and regulatory protections would kick in should Thames Water succumb to its difficulties.

These protections include the water industry’s special administration regime, which would carry out the functions of Thames Water in the interim, as well as the power to recover any revenue shortfall. Tideway also benefits from a mechanism through which it can charge certain customers directly for its usage, though this is considered unlikely to be utilised.

The 25km ‘super sewer’ is being built under the river Thames to help reduce the amount of untreated sewage discharged. It is one of three projects designed to reduce polluting discharges into the Thames by 37 million cubic metres a year.

Numis analyst Colette Ord said the announcement ‘provided helpful clarification’ that INPP’s investment in Tideway would not be impacted by the financial challenges of Thames Water.

Winterflood also welcomed the announcement. ‘The protections outlined... should provide investors with a level of confidence, but the situation warrants monitoring, particularly regarding any delays to project implementation or cash collection,’ it said.

Due for delivery in 2025, the project is unlikely to be derailed due to robust government support for private capital deployment into key infrastructure projects and the corresponding commitment to uphold regulated returns, Winterflood added.

Tideway is INPP’s only water sector investment. It has been invested in the project since its inception, having been announced as the preferred bidder as part of the Bazalgette consortium in 2015.

Ord points to its compelling investment characteristics of a long design life of 120 years, inflation-linked regulated revenues, well-defined protections in a range of downside scenarios and its positive environmental impact.

INPP is believed to be the only investment trust with exposure to Thames Water. HICL Infrastructure (HICL) has a minority stake in Affinity Water, which ‘appears to be in a comparatively better financial position and does not face the same pressure to inject equity to cover past underinvestment’, Winterflood said.

Ord at Numis added: ‘We see minimal read-across from the Thames Water issues to HICL’s Affinity investment.’

HICL is not currently receiving a dividend from Affinity as the business focuses on investment. In March, the fund said there had been further improvement in Ofwat’s relative ranking of operational performance, with Affinity Water now in the top half of all companies.