A rising interest rate environment could prove a boon for the Water Infrastructure Finance and Innovation Act (WIFIA) program, according to a new Fitch Ratings report. The WIFIA loan program has been hugely successful for U.S. water utilities but is currently oversubscribed.
The size of the WIFIA program has increased by 2.5 times since its inception. Congressional appropriations in fiscal 2022 would support an estimated $6.4 billion in WIFIA loans, funding about $13 billion in total project costs. According to Fitch Ratings Director Shannon Groff, the potential growth in loans occurs at an opportune time as interest rates and costs of borrowing in the public markets are increasing.
“WIFIA loans could play a significant role in addressing the over $743 billion the EPA estimates is needed for water infrastructure improvements over the next 20 years,” said Groff.
The WIFIA Loan Program Can Go Far. It Should Go Together.
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