EPA’s 100th WIFIA loan to invest in Santa Clara County, California

EPA Headquarters in Washington, D.C.

The U.S. Environmental Protection Agency (EPA) recently announced two Water Infrastructure Finance and Innovation Act (WIFIA) loans totaling $115 million to Santa Clara Valley Water District in Santa Clara County, California, to improve resiliency of the system’s water infrastructure.

The announcement marks the 99th and 100th loans for EPA’s WIFIA program which has invested a total of $17 billion in infrastructure.

Santa Clara Valley Water District protects residents from the impacts of both storms and drought, and ensures reliable, safe drinking water to Santa Clara residents. Today’s announcement includes two WIFIA loans, one for $41 million to support the Safe, Clean, and Natural Flood Protection Program, and the other for $74 million to support the planning and design costs of the Anderson Dam Seismic Retrofit Project. 

“We know making smart investments in water infrastructure and technology today remains the most cost-efficient way to ensure Santa Clara County has enough safe, clean water now and into the future,” said John L. Varela, Valley Water Board Chair. “Thanks to WIFIA, we can do this in a cost-effective manner to benefit our rate and taxpayers.”

The Safe, Clean, and Natural Flood Protection Program $41 million investment will help upgrade and add channel restoration projects in Sunnyvale, San Jose, and surrounding areas in California to manage stormwater that impacts residents, schools, and businesses. Additionally, Santa Clara Valley Water District will improve water quality by implementing erosion control measures that will protect wildlife habitats and enhance recreational opportunities adjacent to waterways.

Extend WIFIA’s Maximum Term…As A First Step

The Anderson Dam Seismic Retrofit Project will modernize Santa Clara Valley Water District’s largest reservoir to restore lost capacity, address seismic deficiencies, and protect public safety. Santa Clara Valley Water District’s initial $74 million WIFIA loan will support the planning and design costs of the project facilitating these critical first steps in advancing a major infrastructure improvement project. Santa Clara Valley Water District will use financing from a future WIFIA loan to construct the projects. This is the first loan under another master agreement that will commit an additional $580 million in WIFIA assistance to accelerate implementation of Santa Clara Valley Water District’s nearly $1.2 billion Anderson Dam Seismic Retrofit Project.

As a result of the WIFIA program’s flexibility and competitive rates, EPA estimates the Santa Clara Valley Water District will save approximately $47 million by financing these two loans with the WIFIA program. Furthermore, the District anticipates further savings – totaling $256 million – across both projects’ master agreements. Construction and operation are estimated to create 742 jobs. 

“It’s great to see WIFIA’s 100th loan being for a large-scale water management project – that shows the scope and flexibility of the program,” said John Ryan, principal at InRecap LLC. “The benefits are clearly compelling – and they’d be even better for this type of long-development, long-lived project if WIFIA offered a limited buydown for the interest rate and a longer loan term. The limited buydown helps the borrower manage interest rate risk while project plans are being finalized, and a longer loan term for assets like dams matches amortization with the asset’s useful life. That improves debt service management and intergenerational equity for big projects. TIFIA and CIFIA programs have a limited buydown, and Santa Clara’s dam projects show that WIFIA ought to have it too.”

Adding the Limited Buydown to WIFIA Loans

Since the WIFIA program’s inception six years ago, borrowers nationwide have closed 100 loans totaling $17 billion to help finance $36 billion in their critical water infrastructure projects. Borrowers have saved over $5 billion and created 123,000 jobs. These projects will benefit over 50 million people resulting in 1.2 million people receiving safer drinking water and 1,100 million gallons per day of wastewater receiving more treatment before it is discharged to waterways.

“From our first loan to Seattle in 2018 to today’s announcement of our 100th loan to Santa Clara, EPA’s WIFIA program has benefited over 50 million people across the country and created 123,000 jobs,” said EPA’s Assistant Administrator for Water Radhika Fox.

In addition to WIFIA loans, there are many federal funding resources available for communities and utilities to improve vital water and wastewater resources. The Bipartisan Infrastructure Law provides a historic $50 billion investment in upgrading critical water, wastewater and stormwater infrastructure. The Clean Water and Drinking Water State Revolving Funds have successfully provided more than $210 billion in financial assistance since 1988. Learn more here about the WIFIA program and other water infrastructure investments.

EPA is currently accepting letters of interest for WIFIA and SWIFIA loans. Learn more about submitting a letter of interest for a WIFIA or SWIFIA loan.

Leave a Reply

Your email address will not be published. Required fields are marked *