The Water Innovation Fund is opening its doors to innovators from outside the water sector to enter bold solutions to the urgent challenges facing the industry in England and Wales, as it announces the return of the £7.5 million Water Discovery Challenge.
Following the success of the first Water Discovery Challenge in 2023, Ofwat’s Water Innovation Fund will accelerate the development and adoption of promising new innovations for the water sector to benefit customers, communities, the environment and the economy.
In particular, it is inviting ideas from innovators across multiple sectors and disciplines – including energy, cities and transport, construction, agriculture and farming, as well as AI, digital, data and internet of things.
The challenge is run by innovation prize experts Challenge Works, part of Nesta, in partnership with Arup and Isle Utilities. It is open to innovators from outside the water sector and around the world, to bring in fresh thinking and ideas with the purpose of helping entrants break into the water industry.
The water sector faces many challenges that must be solved – achieving net zero emissions, preventing leaks, ending the overuse of storm overflows, tackling pollution, restoring nature and adapting to the impact of climate change – all whilst ensuring that customers are properly served.
The entry period for the second Water Discovery Challenge opened on 20 January 2026 and closes on 8 April 2026. There is no requirement for organisations to partner or receive sponsorship from a water company to enter, but entrants must be a UK registered entity.
Twenty successful entries will be progressed to a finalists’ stage in June 2026, receiving up to £100,000 in seed funding and a package of non-financial support and sector mentorship to develop their solutions.
Ten winning teams will go on to be awarded up to £550,000 in funding in April 2027 to further develop their solutions, and an additional five-month package of non-financial support and sector mentorship, to maximise the chance of the innovations launching and succeeding in the water sector.
Dr Jo Jolly, Director of Environment and Innovation, Ofwat, said:
“The Water Innovation Fund supports bold, scalable solutions to the sector’s toughest challenges. Breakthrough technologies can make a real difference, but the sector can be hard to access for new innovators. The first Water Discovery Challenge proved there’s a talented community of innovators raring to make a difference. Whether its improving services to customers, helping build water secure communities, improving water quality or something else entirely, I’m excited to see the ideas that come forward to deliver transformational benefits to customers, communities and the environment – and act as an engine for economic growth and a people- and nature-positive future.”
The first Water Discovery Challenge named 20 finalists in June 2023 and 10 winners in February 2024.
Dr Alireza Abbassi Monjezi, CEO & Founder, Waterwhelm, a previous winner of the Water Discovery Challenge, said:
“The Water Discovery Challenge gave us access to funding and expert industry support to help us implement our technology for water reuse and desalination. Taking part raised our company profile, helping to establish important connections in the water sector that have been invaluable as we scale. Two years since taking part, we are now working with Northumbrian Water, Anglian Water, SSE Thermal, and AtkinsRéalis to demonstrate our technology at 740 cubic metres per day in a live environment, transforming the sustainability of water used by industry.”
Coinciding with the launch of the Water Discovery Challenge, the Water Innovation Fund is sponsoring the Building Centre’s upcoming ‘Water: Resilience & Innovation for the Built Environment’ exhibition from 23 January to 10 April 2026.
The 11-week event will explore innovations and solutions shaping the future of water in architecture, engineering and urban design. It showcases cutting-edge technologies, pioneering projects and ideas that are driving a new, water-wise approach to building for resilience and sustainability – including those that have been enabled and supported by the Water Innovation Fund.
The launch of Water Discovery Challenge 2 follows on the heels of the launch of the first Water Efficiency Lab competition by Ofwat, seeking innovative solutions to help people reduce their water consumption, which is open to entries until 10 March 2026.
To find out more about the Water Discovery Challenge and the Water Innovation Fund, visit waterinnovation.challenges.org
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