New Federal Water Infrastructure Loans are Rolling Out (WIFIA)

Addressing combined sewer overflows from channels like this one are some of the projects that received WIFIA funding.
Image: Pixabay

The second round of WIFIA federal loans could be as much as $5.5 billion.

The national Water Infrastructure Finance and Innovation Act (WIFIA) program finances critical drinking and wastewater infrastructure through low-interest federal loans for up to 35 years to local governments. It’s one way municipalities can pay for aging public works infrastructure and water pollution control — up to 49 percent of eligible project costs.

Water projects that are eligible for state revolving funds (SRF) can be funded under WIFIA, along with energy efficiency upgrades, stormwater or water reclamation projects and more as long as they meet minimum eligibility requirements — $20 million for large communities (populations above 25,000 people) and $5 million for small communities. Projects must also have a dedicated revenue source.

Prior to late 2015, funding the remaining portion of a project through tax-exempt bonds was illegal, but in addition to SRF, these federal loans can also be combined with private equity, revenue bonds, corporate debt and grants.

This year’s funds — with a stated priority for projects that reduce lead exposure in public drinking water or repair of aging infrastructure — became available with the passage of the Consolidated Appropriations Act in March. The funding is estimated to provide as much as $5.5 billion in loans, which could result in more than $11 billion in water infrastructure projects.

Previously, the U.S. Environmental Protection Agency (EPA) estimated more than $743 billion is needed for water infrastructure improvements nationwide. 

Local governments had to submit letters of interest by July 31st, and three initial loans have been awarded:

Orange County, California

A WIFIA loan of $135 million will help Orange County Water District (OCWD) with the final phase of its Groundwater Replenishment System — an advanced water recycling project that will create a new drought-proof water supply, according to EPA’s announcement.

OCWD is trying to reduce reliance on imported water from the Colorado River and become self-sufficient, but OCWD won’t make water at any cost,” said Denis Bilodeau, OCWD Board President.

San Francisco

The San Francisco Public Utilities Commission received a $699 million WIFIA loan for its Southeast Treatment Plant Biosolids Digester Facilities Project to replace outdated biosolids digestion. The new facility designed for earthquake resilience will transform wastewater solids into high-quality biosolids and biogas on a new site

The city agency estimates WIFIA’s low interest rates will save it up to $398 million, according to EPA’s prepared statement.

Omaha, Nebraska

The city of Omaha received a $69.7 million WIFIA loan for the Saddle Creek Retention Treatment Basin — a project that will reduce stormwater runoff and sewage that ends up in the Missouri River. To address combined sewer overflows during wet weather events, the facility will collect and treat up to 320 million gallons of wastewater and stormwater daily.

I worked with local leaders and the EPA to deliver this investment, which will help the community address combined sewer overflow issues in Omaha’s Saddle Creek Basin. Providing this assistance will alleviate some of the financial stress on households while also protecting Nebraska families’ access to clean water so they can stay healthy and safe,” said Senator Deb Fischer of Nebraska in EPA’s prepared statement.

The funds were established by the Water Infrastructure Finance and Innovation Act of 2014 and for the inaugural round in 2017, EPA received 43 letters of interest and selected 12 projects, representing $2 billion in funding.

Review and download a one-page flyer about WIFIA:

wifia-2-onepager-508-1-web-final2 by Ed Praetorian on Scribd

Learn more about WIFIA and watch for additional loan announcements on EPA.gov.

Explore our previous coverage of infrastructure finance:

6 Infrastructure Finance Themes for Cities

How Can Water Systems Pay for Aging Infrastructure?

 

About the author

Andrea Fox

Andrea Fox

Andrea Fox is Editor of EfficientGov.com and Senior Editor at Praetorian Digital. She is based in Massachusetts.