After a long, slow warm-up lasting more than three years, the Environmental Protection Agency’s water infrastructure loan program finally is rolling. Since April, EPA has cleared its first four Water Infrastructure Finance and Innovation Act, or WIFIA, loans, totaling just over $1 billion, to help build major water projects.
EPA’s WIFIA activity is likely to pick up steam. The agency still has fiscal 2017 funds available for other loans, and more are on the horizon. EPA on Aug. 16 said that for the fiscal 2018 WIFIA round, it received 62 letters of interest from applicants in 24 states and two territories. They requested a total of $9.1 billion, which far exceeds EPA’s $5.5-billion loan capacity for 2018. The agency says it plans to announce the winners in the fall.
Allen S. Gray, director of the Associated General Contractors of America’s utility infrastructure division, says the number of requests “shows that there is a larger demand out there that is not met and people are trying their hardest to find funding in any way they can.” Gray says WIFIA loans are “another tool in the tool box to fund these badly needed projects.”
Congress authorized WIFIA in June 2014 for EPA and Army Corps of Engineers projects, basing it on the Transportation Dept. TIFIA program, created in 1998 for transportation projects. But due partly to an appropriations lag, EPA didn’t approve its first loan until this April: $134.5 million to King County, Wash., for a wastewater-stormwater treatment facility. So far, three other loans have been approved: $69.7 million to the city of Omaha; $699 million to the San Francisco Public Utilities Commission and, most recently, $135 million on Aug. 1 to California’s Orange County Water District. The Corps has yet to get fully underway on WIFIA.
WIFIA loans offer attractive terms. Besides low, federally subsidized interest rates, borrowers can take as many as 35 years to pay them off and don’t have to start repayments until five years after projects’ “substantial completion.”
“We’re really excited about it,” says Kristina Surfus, National Association of Clean Water Agencies director of legislative affairs. “I think it was initially thought that [WIFIA] would be a really strong program on the drinking-water side.” She adds, “But the clean water side has had at least as much interest and success in getting some of the applications approved.”
Three of the four loans cleared to date are for wastewater or stormwater projects. Of the 62 requests for fiscal 2018, 27 are for wastewater-treatment projects and 23 for drinking-water projects.
Congress has stepped up WIFIA funding, appropriating $63 million in direct funds for the program in fiscal 2018, up from 2017’s $30 million. A further hike could happen. A House-passed 2019 spending bill has $75 million for WIFIA; the Senate version has $63 million. More than 85% of those sums may go for loan subsidies and support an estimated loan volume of up to $8 billion.
