New Finance Lease Facility

Pennon Group PLC
28 January 2003


PENNON GROUP PLC

NEW FINANCE LEASE FACILITY

Pennon Group Plc is pleased to announce that its principal subsidiary, South
West Water Ltd,  has recently entered into a new £95m finance lease facility for
water and sewerage plant with a leasing subsidiary of Lombard, part of the Royal
Bank of Scotland Group.  Babcock & Brown arranged the transaction and acted as
lessee adviser.

David Dupont, Pennon's Group Director of Finance said, 'This financing
initiative takes advantage of lower costs of borrowing and provides sub-LIBOR
funding at very attractive rates for the next 20 years.  The new £95m facility
will provide a substantial element of the remaining K3 funding requirements of
circa £110m to £160m.'

For further information, please contact:


David Dupont - Group Director of Finance                    01392 443381
Tony Hooper - Group Treasurer & Taxation Manager            01392 443125


28 January 2003
Ends


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