A proposed £21.7m project to enhance the tourism experience in the Elan Valley has been boosted with its outline business case for funding being approved by the Mid Wales Growth Deal.

The Elan Valleys Lake project, which is being led by Welsh Water, would see over a five-year investment period, the redevelopment and expansion of the not-profit-water company’s Elan Valley visitor centre overlooking the Caban Coch Dam, a hub for water sports and events, new tourism accommodation, including glamping pods, and the upgrading of footpaths and bike trails. The project is also committed to woodland conservation management and green energy supply through connections to the hydro mains ring.

As well as seeking backing from the £100m UK Government funded Mid Wales Growth Deal, Welsh Water said it would make a “significant” financial contribution itself as well as seeking other private sector investment. It said it couldn’t provide a figure on what amount towards the £21.7m project cost it is seeking to secure from the Growth Deal.

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Having secured outline planning consent, the project will now advance to the final business case assessment stage.

Martin Driscoll, Welsh Water’s director of business services and people and who is leading the Elan Valley Lakes project, said: “We are pleased that the project has reached such an important stage as we aspire to deliver a flagship destination in Mid Wales. We believe it will be key to achieving the growth deal’s ‘strengthened tourism offer’ priority area. This project aims to enhance visitor experience, increase revenue and sustain the natural beauty and environment of the Elan Valley.

“We look forward to continuing to work with the Mid Wales Growth Deal team to make this happen.”

Welsh Water said the project aligns with the Growth Deal’s strategic growth priorities by delivering sustainable tourism. It said it will also minimise environmental impact through low-carbon development and the use of renewable energy sources, which will contribute to Welsh Water’s path to achieving net zero emissions. It will also see restoration and an expansion of the Celtic Rainforest in the Elan Valley, by connecting and restoring fragmented areas to enhance biodiversity.

To support the development a full business case, Welsh Water has engaged an architect to produce designs for an enlarged visitor centre. Mike Booth, Elan Valley visitor attraction manager said: “The visitor centre will be reimagined to offer panoramic views of Caban Coch Dam from the café; together with a new reception and retail space, planetarium and exhibition. It will also incorporate a training kitchen to support apprenticeships, along with upgrades to wastewater management facilities. This is a very exciting time for Elan Valley.”

A spokesperson for the Growing Mid Wales Board said: “We were pleased to approve the outline business case for this project. It’s an exciting milestone to be the first project to reach this step with the Mid Wales Growth Deal so far.

“There is a lot of work to do with Welsh Water on the project, but we will do what we can to see the growth deal investment leveraged to its full potential and attract investment into the region to enhance and improve our tourism offer.

“Mid Wales is already on the map in terms of outdoor adventure. However, this investment could drive further improvements to the sector while keeping conservation and sustainability as key priorities.

“The creation of new facilities and assets will help draw in more varied visitors to Mid Wales, creating jobs directly. In the wider visitor economy, it will give people more reasons to visit and stay in Mid Wales, supporting a greater variety of jobs in the region’s leisure, retail and hospitality industry.”