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Water Infrastructure Funding

by | Jul 28, 2014 | Government Entities

iStock_000005502322Medium_200_217The recently enacted federal Water Resources Reform and Development Act has the potential to advance the nation’s water infrastructure by streamlining approvals for environmental reviews of projects, creating a pilot program to explore the use of public-private partnerships by the U.S. Army Corps of Engineers, and making it easier to leverage private-sector investments to augment public funding.

As officials contemplate how they will finance water infrastructure improvements, one provision in the law, the newly created Water Infrastructure Finance and Innovation Act (WIFIA) loan program, is of particular interest.

Co-administered by the Environmental Protection Agency (EPA) and the Army Corps, WIFIA will provide secured loans and loan guarantees to both government and non-government entities for up to 49 percent of eligible project costs.

Projects financed through WIFIA must exceed $20 million in total cost and must be deemed creditworthy by EPA or the Army Corps.

While WIFIA provides a welcome additional source of financing for water projects, a number of challenges remain:

  • The administrative roles of EPA and the Army Corps and their respective application procedures have yet to be fully fleshed out
  • Coordination between the agencies might also be challenging
  • Limited funding for program administration exists
  • Prospective borrowers should anticipate a slow process, initially

The potential impact of WIFIA on the U.S. water and wastewater market is being closely tracked by the industry. Public officials will likely begin to see increasing interest from private operators and investors.

To read the entire article, please visit www.governing.com.

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