The President of the United states, Barack Obama, has signed a Presidential Memorandum to launch the Build America Investment Initiative, a government-wide initiative to increase infrastructure investment and economic growth by engaging with state and local governments and private sector investors to encourage collaboration, expand the market for public-private partnerships (PPPs) and put federal credit programs to greater use.
The Build America Investment Initiative taps into the opportunity to increase the pipeline of effective public-private-partnerships and other innovative financing mechanisms:
- High Demand: Institutional investors, both domestic and international, recognize the strength of our economy and want to invest in America. In 2013, the U.S. was the top destination for foreign direct investment with over US$230 billion. The global investment community has over US$83 trillion dollars with a growing appetite for infrastructure. That is potentially hundreds of billions of dollars to fund the building of U.S. public-private infrastructure.
- Proven Approaches: Some states and communities have established successful PPPs and have developed strong institutional knowledge of how these projects are best structured and managed. Expanding that know-how to other states has the potential to increase the flow of capital by tens of billions of dollars over the next few years. Today, for example, the top five states in PPPs have nearly twice the per-capita value of projects as the next 20 best states - and if those states caught up, it could mean up to US$30 billion worth of infrastructure projects.
As part of the Initiative, the Administration is launching the Build America Transportation Investment Center, housed at the Department of Transportation (DOT). This center will serve as a one-stop shop for state and local governments, public and private developers and investors seeking to utilize innovative financing strategies for transportation infrastructure projects. This center will provide:
- 'Navigator Service' for the Public and Private Sector: Through hands-on support, advice and expertise, the center will make DOT credit programs more understandable and accessible to states and local governments and leverage both public and private funding to support ambitious projects. The center will also provide private sector developers and infrastructure investors with tools and resources to identify and execute successful PPPs.
- Improved Access to DOT Credit Programs: The center will encourage awareness and efficient use of existing resources at the Department, including the Transportation Infrastructure Finance and Innovation Act (TIFIA) program. TIFIA provides long-term, flexible financing to highway and transit projects that feature dedicated revenue sources. The center will also focus on the use of key DOT programs including the Private Activity Bond program (PABs), and the Railroad Rehabilitation and Improvement Financing Program (RRIF).
- Technical Assistance: The center will share best practices from states that are leading the way on private investment to states that have not yet adopted innovative financing strategies, encouraging a more robust national market. Through a website and on-demand technical assistance, the center will provide information about DOT credit programs, case studies of successful projects and examples of deal structures, standard operating procedures for PPP projects and analytical toolkits.
- Information to Reduce Uncertainty and Delays: The center will work in partnership with the interagency Infrastructure Permitting Improvement center to provide visibility for local and state governments, project sponsors and investors on the permitting process.