EPA chief announces $225 million WIFIA loan for Hampton Roads Sanitation District

At a recent event in Suffolk, Virginia, U.S. Environmental Protection Agency (EPA) Administrator Andrew Wheeler announced a $225 million Water Infrastructure Finance and Innovation Act (WIFIA) loan to the Hampton Roads Sanitation District (HRSD). This WIFIA loan represents the first loan provided under an agreement that will commit $1.05 billion in WIFIA assistance to help finance one of the first major water reuse programs on the east coast of the United States.

“EPA has helped finance $14.5 billion in water infrastructure through the WIFIA loan program to better protect public health and support projects including those that enhance water reuse,” said EPA Administrator Andrew Wheeler. “By supporting projects in Virginia through the Sustainable Water Initiative for Tomorrow (SWIFT) Program, new infrastructure can be built to protect groundwater and save ratepayers money.”

The SWIFT program will use innovative water reuse and advanced water treatment technologies to replenish the overdrawn Potomac Aquifer and restore its water supply. It will implement more than 20 projects across the service area to upgrade existing treatment works, adding advanced water treatment facilities and multiple wells to add drinking water quality SWIFT Water to the stressed Potomac Aquifer. By replenishing the Potomac Aquifer, the program will help restore water supply, prevent saltwater intrusion, and mitigate land subsidence related to aquifer withdrawals in coastal Virginia. The program will also improve the quality of the Chesapeake Bay by reducing surface water discharges by approximately 100 million gallons per day—90 percent of HRSD’s discharge to the Bay watershed.

The sustainability, security and resiliency benefits of this project highlight EPA’s commitments under the National Water Reuse Action Plan. The Action Plan identifies 37 specific actions across 11 strategic themes, including highlighting the potential for WIFIA to help finance water reuse projects. Over the coming months, EPA will be seeking input from stakeholders that will help inform the next iteration of the Action Plan, which is slated for release in Spring 2021.

“Realizing HRSD’s vision that future generations will inherit clean waterways and be able to keep them clean requires significant investment today in clean water infrastructure,” said HRSD Commissioner and Former Virginia Secretary of Natural Resources Molly Joseph Ward. HRSD has spent $1.64 billion over the past decade and will invest another $8.47 billion over the next two decades in clean water infrastructure. Clean water is expensive and can only be achieved and maintained through effective partnerships with citizens, non-profits, and government at all levels. Providing low cost loans through the WIFIA program is the federal government’s contribution to clean water in Hampton Roads and we are pleased to be able to partner with them to save Hampton Roads’ ratepayers almost three percent of the total projected investment over the next two decades.”

This project phase will cost $460 million, and EPA’s WIFIA loan will finance nearly half of that figure. In July 2020, Virginia’s Clean Water Revolving Loan Fund program closed a loan with Hampton Roads Sanitation District to finance $100 million of the SWIFT Program, its largest loan to date. The remaining project funds will come from revenue bonds. The WIFIA loan will save Hampton Roads Sanitation District an estimated $72.4 million compared to typical market financing. Project construction and operation are expected to create 1,400 jobs. EPA and HRSD have entered into a master agreement for future WIFIA loans to support this important project.

WIFIA is providing financial support at a critical time as the federal government, EPA, and the water sector work together to help mitigate the public health and financial impacts of COVID-19. Since the beginning of March 2020, WIFIA has announced eighteen loans and updated five existing loans with lower interest rates. These recent efforts by EPA’s WIFIA program will save ratepayers over $1 billion compared to typical market financing. Since the first WIFIA loan closed in April 2018, EPA has now issued 34 WIFIA loans totaling $6.7 billion in credit assistance to help finance $14.5 billion for water infrastructure projects while creating 31,000 jobs and saving ratepayers $3.3 billion.

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