WIFIA Series - Article 1 of 4
Communities across the country are facing the challenge of finding affordable, accessible, and sustainable financing to update their aging water infrastructure. The Water Infrastructure Finance and Innovation Act (WIFIA) program is one financing option that has an established track record of helping communities address their water infrastructure challenges. The WIFIA program is a government bank operated by the U.S. Environmental Protection Agency (EPA) that provides supplemental, flexible, low-cost credit assistance to public and private borrowers for various types of wastewater, drinking water, and stormwater projects. The WIFIA program offers long-term loans that can be combined with State Revolving Fund assistance, municipal bonds, and federal and state grants to help communities deliver more critical water infrastructure projects for a lower cost with less impact on rate payers. The WIFIA program works one-on-one with communities to provide assistance that meets their individual needs.
The WIFIA program has a robust history of providing loans to borrowers in California. As of July 2023, the WIFIA program has issued 41 loans to a wide range of communities throughout California, with populations between 10,000 and 5 million people. These WIFIA loans provide $6.8 billion in credit assistance to help finance more than $14.5 billion in project costs and save borrowers across the state over $2.8 billion.
WIFIA loan sizes in California range from $19 million—for Helix Water District in San Diego County to increase the region’s drinking water resiliency and expand water reuse opportunities—to $700 million for the San Francisco Public Utilities Commission to construct new biosolids digester facilities. There is a diverse mix of borrower and project types in the WIFIA program’s California portfolio, in part due to the pre- and post-loan closing flexibilities that WIFIA financing can offer.
| Pre-Closing | Post-Closing |
| Fixed interest rate locked in at closing | Interest does not accrue until loan is drawn |
| Borrower credit does not impact interest rate | No penalty for prepayment |
| WIFIA can take a subordinate lien position | Sculpted repayment schedule to grow payments over time |
| Loan closing in as little as 4 months (or faster for repeat borrowers) | Ability to request monthly disbursements |
| Options for project bundling | Disbursements processed within 15 days of request |
One recent example of the benefits of WIFIA financing is the City of San Diego, who received a $225 million WIFIA loan in 2022 to finance the first project under its Stormwater Capital Improvement Program, which includes the design and construction of traditional and green infrastructure projects. San Diego’s program will improve the water quality of our beaches and bay and safeguard the public from flooding risks by modernizing aging, deteriorated stormwater infrastructure and implementing innovative multi-benefit stormwater management technologies. In addition, the revitalization projects under this program will restore streams and rehabilitate riparian environments.
About this WIFIA project, City of San Diego Mayor Todd Gloria said “Our storm drain system is largely underground and out of sight, but the implications of this aging infrastructure failing are massive – from serious flooding in our neighborhoods to pollution of our bays and the ocean. While replacing storm drains and upgrading pump stations doesn’t capture the public’s attention like fixing potholes, these major investments in critical infrastructure are incredibly important to our neighborhoods and quality of life.”
San Diego utilized several of the WIFIA program’s flexibilities during this transaction. One such flexibility is the use of a master agreement structure, under which San Diego can finance multiple WIFIA projects under its $700 million Stormwater Capital Improvement Program with an overall WIFIA commitment of over $359 million. Additionally, this loan was the first transaction for the WIFIA program that used a municipal lease financing structure to finance the project. Due to this unique feature, San Diego’s loan included customized loan terms. For the first loan, San Diego plans to defer repayments for 5 years post-substantial completion of the project, highlighting another loan structuring flexibility of WIFIA loans. Overall, these WIFIA loan features will save San Diego an estimated $63 million over the life of the loan.
Like a bank, the WIFIA program has funding available on an ongoing basis. This allows prospective borrowers to request financing on their schedule. When a prospective borrower is ready, they can submit a letter of interest to the WIFIA program to begin the financing process.
Contact the WIFIA team today to learn more about WIFIA financing and how to submit a letter of interest. Visit www.epa.gov/wifia and contact WIFIA staff directly at wifia@epa.gov.
Jorianne Jernberg is the director of the WIFIA Management Division. In this capacity, she is spearheading the implementation of a Federal infrastructure bank at EPA – overseeing the origination, underwriting, negotiation, and monitoring of water, wastewater, and stormwater projects around the country. Prior to joining EPA, Jorianne served as the head of risk management and financial operations at the TIFIA program within the Department of Transportation where she was responsible for a team conducting a wide range of financial, programmatic, and credit functions.
Dallas Shattuck serves as a Senior Program Manager for the U.S. EPA’s Water Infrastructure Finance and Innovation Act program, where she focuses on program processes, policy, and stakeholder engagement. Previously, Dallas spent over 4 years working on the Drinking Water State Revolving Fund team at U.S. EPA. Dallas has a M.A. in Environmental Resource Policy from the George Washington University and B.S. degrees in Chemistry and Criminal Justice from Saint Francis University.
