EPA’s Water Financing Program

June 14, 2021
WIFIA, SWIFIA help our nation’s communities address critical infrastructure needs.

Utilities and local governments across the country face difficult decisions about financing much needed maintenance and upgrades to support safe drinking water, wastewater, and stormwater management. Upgrades and maintenance can be costly and keeping customer rates affordable is challenging—making every dollar count. The U.S. Environmental Protection Agency’s (EPA) Water Infrastructure Finance and Innovation Act (WIFIA) loan program is helping communities afford their water infrastructure investments by saving billions of dollars.

WIFIA loans provide innovative and flexible financing that support a wide range of projects in large and small communities. Through WIFIA loans, eligible public and private borrowers can finance a wide variety of water infrastructure projects. Some of these projects include replacing lead pipes and service lines, upgrading and modernizing drinking water, wastewater, and stormwater systems, addressing emerging contaminants in drinking water, supporting clean water infrastructure across rural America, and increasing water system resiliency.

Over the past three years, the WIFIA program has become one of the most effective financing tools used to upgrade the nation’s infrastructure. EPA closed its first WIFIA loan in 2018.  And, since that time the agency has closed more than 50 loans with large and small communities across the country. Combined, these loans are providing over $9 billion to support water infrastructure while creating more than  51,000 jobs, saving communities over $4 billion. There are currently more than 70 additional loans totaling almost $12 billion in the pipeline, with $6.5 billion in financing available this year.  The WIFIA program will continue to accelerate investment in vital water infrastructure projects.

WIFIA loans are an important tool for communities undertaking significant infrastructure investments since there are distinct benefits not readily available from other financing alternatives. The WIFIA program is borrower-focused, with flexible, customized loan terms to stimulate investment while minimizing costs for ratepayers. Repayments can be tailored to match the specific needs of a project and deferred for up to five years after completion of project construction. Repayment schedules can include interest-only payment periods. In addition, borrowers can draw funds as needed and there isn’t a penalty for prepayment. Interest rates are set at closing based on the Treasury rate and are not impacted by credit rating. The average interest rate for the WIFIA portfolio is 1.68%. Loan terms are up to 35 years after completion of project construction.

In 2021, DC Water financed improvements to their drinking water distribution system by upgrading  water mains and pumps with a WIFIA loan, saving an estimated $30 million while creating over a thousand jobs. “These low-interest funds help us advance critical infrastructure projects, providing much-needed upgrades and rehabilitation to the District’s water, sewer, and wastewater treatment facilities and infrastructure,” said DC Water Chief Financial Officer Matthew Brown. “At the same time, paying lower interest rates on loans saves us money on debt service that we can pass along to customers in the form of less steep rate increases.”

The Portland Water Bureau is using $727 million WIFIA loan to finance improvements to their drinking water system—saving $247 million while creating over 4,700 jobs. “Using WIFIA financing for most of the construction costs of the Bull Run Treatment Projects captures significant money-saving benefits for our ratepayers,” said Portland Water Bureau Director Gabriel Solmer. “Not only does WIFIA’s low interest rate guarantee savings, but its long-term repayment schedule doesn’t begin until the projects are built and ratepayers are getting the benefits of the projects as they share in the costs.” 

EPA’s WIFIA program recently opened its fifth round of funding, making available approximately $5.5 billion to eligible prospective borrowers, including municipal entities, tribes, corporations, and partnerships, and State infrastructure financing authorities. The State infrastructure financing authority WIFIA (SWIFIA) program has an additional $1 billion available exclusively for State infrastructure financing authorities. The program is always adapting to meet financing needs and is now  offering to finance a larger share of the cost for projects serving small communities with a population of 25,000 or less.

To be considered for WIFIA or SWIFIA funding, eligible prospective borrowers must submit a letter of interest. The deadline to submit the letter of interest is June 25, 2021, for SWIFIA loans and July 23, 2021, for WIFIA loans.

Contact [email protected] to schedule a meeting with EPA’s WIFIA team if you have questions about financing a project or want to learn more about the program. More information can be found at: www.epa.gov/WIFIA.

About the Author

Andrew D. Sawyers

Andrew D. Sawyers  is the Director of the Office of Wastewater Management at the U.S. Environmental Protection Agency in Washington, DC. He oversees the National Pollutant Discharge Elimination System (NPDES) program, the Clean Water Act’s mechanism for the permitting of municipal and industrial discharge into surface waters of the U.S. As the Director of OWM, Andrew is also responsible for multiple technical and financial assistance tools for the development and maintenance of the country’s wastewater infrastructure, including WIFIA, the Clean Water State Revolving Fund (SRF) and EPA’s Water Finance Center.  He previously worked for the Maryland Water Quality Financing Administration where he managed the state’s Clean Water and Drinking Water SRFs and the Maryland’s Chesapeake Bay Restoration Fund. Andrew has a Ph.D. from Johns Hopkins University in Geography and Environmental Engineering.