EPA Selects 39 Waterworks Projects to Apply for Billions in Financing
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The agency is teeing up projects for a new round of loans under a low-cost borrowing program for water and sewer infrastructure.
Local governments, agencies and utility companies behind 39 major water and sewer projects in states across the U.S. can move ahead applying for billions of dollars in financing through a federal program that provides low-cost loans for waterworks infrastructure, the Environmental Protection Agency said Friday.
The loans would be available under the agency's Water Infrastructure Finance and Innovation Act program, or WIFIA for short. EPA estimates that, as funds become available, $6.7 billion in financing will flow to projects worth upwards of $15 billion in 24 states. WIFIA is designed to support regionally and nationally significant projects.
EPA emphasized that 14 of the projects include components meant to help infrastructure better withstand the effects of extreme weather and climate change, and that many also include elements involving cybersecurity and water reuse.
On Thursday, in a separate set of announcements, EPA said it would funnel $7.4 billion in funding to states, tribes and territories during 2022 for water projects, money available under the federal infrastructure package President Biden signed last month.
Interest rates on WIFIA loans are set to be aligned with the generally low yields on U.S. Treasury debt. Borrowers get other perks as well, like customized repayment schedules and deferrals on repaying the debt for up to five years after a project is mostly completed.
But there are also some key constraints. For instance, financing through the program can't cover more than 49% of a project's eligible costs. And there are minimum thresholds for the size of projects—$20 million for larger sized communities, and $5 million for places with 25,000 residents or less.
To access financing with the program, potential borrowers must pass through two phases.
First, EPA announces the funding it has available and interested applicants submit information about their plans. The agency selects projects from among these applications that it views as a good fit for funding and invites them to apply for loans. Prospective borrowers that clear that first step enter into the second phase of the process where they provide more details about their projects, which undergo further reviews and approvals before loans are finalized.
EPA's announcement Friday was about projects proceeding to the second phase of the application process.
One of the applicants moving forward is Boise, Idaho. The city is seeking $272 million in WIFIA financing for a package of water projects, following voter approval in November of up to $570 million in borrowing on waterworks. Projects there would be focused improving the sewer system, including adding a new program to recycle used water and upgrades to a facility built in the late 1940s that the city says treats 10 to 13 million gallons of wastewater each day.
“This is a first. WIFIA has not been awarded in Idaho before and our leadership’s willingness to green light innovation in our utility is what has opened this opportunity,” Boise Public Works Director Steve Burgos said in a statement.
Projects in Charlotte, North Carolina, Chattanooga, Tennessee, Philadelphia and King County, Washington, where Seattle is located, were among the others that made the cut. (A full list can be found here with the EPA announcement.)
EPA said it was also inviting state agencies in Indiana and New Jersey to apply for $472 million in financing through a water infrastructure financing program specifically designed for states.
Since the first WIFIA loan in 2018, the program has provided around $12 billion of waterworks financing through about 60 loans.
Bill Lucia is a senior editor for Route Fifty and is based in Olympia, Washington.
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