US EPA receives record number of requests for $9.1bn water infrastructure finance
- August 22, 2018
- Category: Investment and Finance, North America
The U.S. Environmental Protection Agency (EPA) has announced this week it has received 62 letters of interest (LOIs) collectively requesting a record $9.1 billion in infrastructure loans from a wide range of prospective borrowers in response to the 2018 Water Infrastructure Finance and Innovation Act (WIFIA) funding program.
Commenting on the record level, EPA Office of Water Assistant Administrator David Ross said:
“The more than $9 billion in WIFIA loans requested is nearly double our lending capacity for 2018, demonstrating the critical need for investment in our nation’s water infrastructure and strong support for EPA’s Water Infrastructure Finance and Innovation Act program.”
“EPA looks forward to reviewing the letters of interest we received as we advance the President’s infrastructure agenda and help communities better protect public health and water quality.”
The EPA received LOIs from prospective borrowers located in 24 states, the District of Columbia, and Guam for a wide variety of projects, including wastewater, drinking water, water recycling, desalination, stormwater management, and combined approaches.
More than half of the LOIs addressed one or both of EPA’s 2018 WIFIA Notice of Funding Availability (NOFA) priorities: reducing exposure to lead and other contaminants in drinking water systems and updating aging infrastructure.
While the majority of prospective borrowers are municipal government agencies, other prospective borrowers include small communities, public-private partnerships, corporations, and a tribe.
In April 2018, EPA announced the availability of additional WIFIA funding that could provide as much as $5.5 billion in loans. Leveraging private capital and other funding sources, the EPA said the projects could support $11 billion in water infrastructure investment and create up to 170,000 jobs.
Prospective borrowers responding to the 2018 NOFA were required to submit a letter of interest by July 31, 2018. The Agency is currently evaluating the submitted letters of interest for project eligibility, credit worthiness, engineering feasibility, and alignment with WIFIA’s statutory and regulatory criteria. Via the competitive process, the EPA will select the projects it intends to finance and invites them to submit a formal application this fall.
Established by the Water Infrastructure Finance and Innovation Act of 2014, the WIFIA program is a new federal loan and guarantee program at EPA that aims to accelerate investment in the nation’s water infrastructure by providing long-term, low-cost supplemental credit assistance for regionally and nationally significant projects.
The Agency is currently processing applications from the 2017 WIFIA NOFA. To date, over $1 billion in WIFIA credit assistance has been issued through loans to King County (Washington), the City of Omaha (Nebraska), the San Francisco Public Utilities Commission (California), and the Orange County Water District (California).
According to EPA’s estimate of national drinking water and wastewater needs, over $743 billion is needed for water infrastructure improvements.
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