WIFIA Requests Dip, But Dollars Sought Outrun Funds Available
The number of requests for the latest round of the U.S. Environmental Protection Agency’s water infrastructure loan program is down from the fiscal 2018 competition but the loan dollars requested exceed the $6 billion that the agency has to lend.
EPA said on July 19 that it received 51 letters of interest for the 2019 round of its Water Infrastructure Finance and Innovation Act (WIFIA) loan program, compared with 62 requests last year.
But those submitting letters are seeking a total of $6.6 billion, which tops the $6 billion EPA has available.
The agency says that $6 billion in loans can help to finance about $12 billion in projects.
In the latest round, which draws on fiscal 2019 appropriations, EPA for the first time said that water reuse and recycling projects were a priority for WIFIA loans. By ENR’s count, about a dozen of the projects involve reuse or recycling.
EPA said the 51 requests came from agencies in 21 states.
The program offeres attractive tems, including a loan payback period that can extend for 35 years past a project's substantial completion dates. The loan rate is the same as the Treasury bill rate for a comparable maturity period.
WIFIA was authorized by Congress in the 2014 Water Resources Reform and Development Act but it was slow to launch. Partly because of small amounts of appropriations, EPA didn’t approve its first loan until April 2018.
But since then, the agency has stepped up its activity, approved more than $2 billion in loans for nine projects.
The most recent action came on July 17, when EPA approved a $218 million WIFIA loan to Silicon Valley Clean Water in Redwood City, Calif., for wastewater infrastructure upgrades in the San Francisco Bay Area. That loan uses fiscal 2018 funds. Congressional appropriations cover the subsidy cost of the loans.
EPA will review the letters of interest for the 2019 round and evaluate the requests. It then will invite at least some of the projects to submit formal applications. It will approve loans for some of those.
The agency didn’t specify when it would send out invitations to apply or approve the loans.
But based on WIFIA’s brief history, EPA probably will approve loans individual loans at various points through the succeeding months, not all in one batch.
It’s worth noting that the latest 2018 round project award came more than nine months after fiscal 2018 ended.
WIFIA is modeled on the Dept. of Transportation’s TIFIA—for Transportation Infrastructure Finance and Innovation Act—program, established in 1998.
A Feb. 15 Congressional Research Service (CRS) report said that TIFIA has provided a total of $32 billion, through fiscal year 2018. The assistance went to 74 projects whose total cost was about $117 billion, measured in 2018 dollars.
All but one TIFIA credit agreement has been in the form of loans. The other agreement was a loan guarantee, CRS said.