WIFIA program — no longer a “pilot” — is set to grow.
By Joel C. Beauvais and David J. Penna
On October 23, 2018, President Trump signed into law the America’s Water Infrastructure Act of 2018 (AWIA 2018). This bipartisan legislation, among other elements, reauthorized the Water Infrastructure Finance and Innovation Act (WIFIA). WIFIA, which established a federal water infrastructure bank administered by the US Environmental Protection Agency (EPA), is intended to ramp up federal funding for large-scale projects. Under the program, EPA can make low-interest, long-term loans and loan guarantees for a broad range of water projects. Eligible users include private, public, or mixed public-private entities, projects generally must be US$20 million or larger, and loans or guarantees can cover up to 49% of eligible costs. For a broader overview, please see Latham & Watkins’ WIFIA White Paper.
Although WIFIA was enacted in 2014, Congress did not fund the program until Fiscal Year (FY) 2017. In FY 2017, Congress appropriated funding sufficient to provide more than US$3 billion in loans or guarantees, and in FY 2018 expanded this to support more than US$5 billion in loans or guarantees. WIFIA uses a two-step selection process, beginning with the project proponents submitting letters of interest to EPA; from these, EPA selects a subset of projects to make a full application, with the expectation that projects making a full application ultimately will be approved. EPA closed its first loan in April 2018 and recently selected 39 projects to apply for FY 2018 funding. The program enjoys robust bipartisan support, and appears poised to continue to grow in coming years. While the reauthorizing legislation made only modest changes to WIFIA, water project developers considering using the program should note three key takeaways.