The U.S. Environmental Protection Agency is preparing to help finance more water infrastructure projects with $7.5 billion in Water Infrastructure Finance and Innovation Act funding, it announced Sept. 6.
The WIFIA program offers low-cost loans to help fund the planning, design and construction of water infrastructure projects. EPA says it offers favorable terms not usually offered by banks, such as interest rate resets, debt structuring and fast disbursements, and loan recipients can defer payment for up to five years after a project is completed. Borrowers can combine financing for multiple projects into a single WIFIA loan.
This funding round, which is the program’s eighth since it was established in 2014, includes $6.5 billion available through WIFIA and another $1 billion through the State Water Infrastructure Financing Authority (SWIFIA), which is available exclusively to states to help finance their projects.
EPA says it is prioritizing projects focused on improving health and livability in disadvantaged communities, lead service line replacements, addressing PFAS and other contaminants, strengthening infrastructure for climate resilience and supporting innovation in the water sector.
“With these resources, communities will keep building on progress to replace lead pipes, cut PFAs pollution and protect people from climate change,” EPA Administrator Michael Regan said in a statement.
EPA is accepting letters of interest for the WIFIA program on a rolling basis. A wide variety of treatment, transmission and distribution, source, storage and other projects are eligible for the program. To qualify, they should be estimated to cost at least $20 million, or $5 million for small communities serving no more than 25,000 people. WIFIA loans can cover up to 49% of eligible costs, or 80% of costs for small community projects.
EPA aims to put 15% of the funding toward small community projects.
Just one day earlier, EPA officials announced that they had selected the Upper Thompson Sanitation District in Colorado for a $96-million WIFIA loan to support construction of a $124-million water reclamation facility in Estes Park, Colo. The facility will implement new treatment technology and replace another treatment facility that is reaching the end of its useful life.
“As we prepare for our sustained, long-term environmental stewardship, borrowing through the WIFIA program allows the construction of critical new infrastructure to serve the residents of the Estes Valley and protect the Big Thompson River for decades to come,” said Chris Bieker, the sanitation district manager, in a statement.
In that case, the sanitation district expects to save about $79 million by partially financing the work through WIFIA.