U.S. Congress and Senate passes WIFIA Pilot Program

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U.S. Congress and Senate passes WIFIA Pilot Program

Barack Obama is expected to quickly sign into the law the Water Resources and Reform Development Act of 2014 (WRRDA) after it passed the House on 21 May and the Senate on 22 May.

WRRDA earmarks $12.3 billion for 8 current and 34 new water projects and creates the Water Infrastructure Finance and Innovation Act (WIFIA), which establishes a 5 year pilot program administered by the Environmental Protection Agency (EPA) and Corp of Engineers to provide low cost loans for water, wasterwater and flood control infrastructure projects.

Under the WIFIA program, the Army Corps of Engineers and the EPA would be authorized to provide up to US$175 million in direct loans and loan guarantees for the construction of critical water infrastructure projects (drinking water systems, wastewater treatment plants, desalination plants, new water supply facilities, levee and flood control projects) including those delivered through PPPs.

WIFIA is very closely modeled on the U.S. Department of Transportation TIFIA program but while the 2014 authorization for TIFIA under MAP-21 is US$1 billion, funding for the WIFIA program totals US$350 million over the entire 5-year pilot.  The program will generally limits WIFIA support of a project to 49% of the project's costs.

David LaFrance, Chief Executive Officer of the American Water Works Association, stated:

The imminent creation of the Water Infrastructure Finance and Innovation Authority is a significant breakthrough in confronting the U.S. water infrastructure challenge. WIFIA will reduce the financing costs of critical infrastructure projects, allowing communities to fix and expand water systems at a lower cost to their customers. Our elected representatives and senators deserve our gratitude.

WRRDA also creates a separate 15-project pilot program, the Water Infrastructure Public-Private Partnership Program, to evaluate the use of PPPs to accelerate the planning and construction of projects for coastal harbor improvement, channel improvement, inland navigation, flood damage reduction, aquatic ecosystem restoration and hurricane-storm damage reduction to help the Corps address a US$60 billion project backlog.

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