April 26, 2019
WIFIA Program: Background and Recent Developments
To promote development of and private investment in water
publicly owned wastewater utilities for projects that support
infrastructure projects, the 113th Congress authorized the
statutory objectives.
Water Infrastructure Finance and Innovation Act (WIFIA)
in the Water Resources Reform and Development Act of
Program Design
2014 (P.L. 113-121, Title V; 33 U.S.C. §§3901-3914).
Annual WIFIA appropriations primarily cover long-term
Initially established as a five-year pilot program, WIFIA
credit subsidy costs, which are calculated to cover the risk
authorizes the U.S. Environmental Protection Agency
that the loan will not be repaid. As such, relative to its
(EPA) and the U.S. Army Corps of Engineers (USACE) to
budget authority (e.g., $68 million in FY2019), WIFIA
provide credit assistance—secured or direct loans—for a
appropriations may provide a large amount of credit
range of water infrastructure projects. The 115th Congress
assistance (e.g., estimated at $7.31 billion for FY2019).
made several changes to the WIFIA program in America’s
WIFIA assistance, which is repaid to the U.S. Treasury, is
Water Infrastructure Act of 2018 (AWIA; P.L. 115-270),
intended to have less of a federal budgetary effect than the
enacted on October 23, 2018.
SRFs as states do not repay capitalization grants to the
federal government.
Capital improvements for drinking water and wastewater
systems seek to protect public health and support local
Each WIFIA loan has a fixed interest rate, which is the U.S.
economies, and typically require major investments. In its
Treasury rate for loans with a similar maturity on the date
most recent compilation surveys, EPA estimated that the
of loan execution. WIFIA borrowers can structure the
capital cost of wastewater and drinking water infrastructure
repayment schedule to align with anticipated receipt of
needed to meet Clean Water Act (CWA) and Safe Drinking
revenue. Initial payments of WIFIA assistance may be
Water Act (SDWA) objectives exceeds $744 billion over 20
deferred up to five years after the project’s completion and
years. This amount does not include costs to extend services
the repayment period may be extended up to 35 years after
to accommodate population growth or to repair
completion. WIFIA loans may be combined with other
infrastructure not linked to statutory compliance and related
sources of debt-financing. For more information, see CRS
health and environmental goals.
Report R43315, Water Infrastructure Financing: The Water
Infrastructure Finance and Innovation Act (WIFIA)
Communities generally pay for water projects through debt-
Program.
financing (e.g., municipal bonds) and revenue from user
fees. In 2017, state and local resources accounted for more
Eligibility
than 96% ($108.8 billion) of the public spending on water
The range of eligible projects for the EPA-administered
utilities, while the federal contribution accounted for the
WIFIA program is broader than the SRF programs. WIFIA
remaining 4% ($4.2 billion), according to the Congressional
eligible projects include SRF projects as well as
Budget Office.
desalination, drought mitigation, and enhanced energy
efficiency projects for drinking water systems or
wastewater treatment works.
USACE-Administered WIFIA Program
Eligible projects for the authorized USACE-administered
Eligible entities for WIFIA assistance include (1) a state
WIFIA program include water resources projects for flood
infrastructure financing authority (SIFA); (2) a corporation;
reduction projects, environmental restoration, coastal and
(3) a partnership; (4) a joint venture; (5) a trust; or (6) a
harbor navigation improvement, among other purposes. The
federal, state, local, tribal government or instrumentality.
USACE-administered WIFIA program has not advanced into
Unlike the Clean Water SRF, both public and private
implementation. In the conference report for USACE FY2019
entities can use WIFIA assistance for eligible projects.
appropriations (H.Rept. 115-929), Congress directed USACE
Private entities must have a public sponsor to be WIFIA
to develop its proposal for WIFIA.
eligible.
WIFIA establishes broad selection criteria that EPA uses to
WIFIA complements two EPA-administered programs: the
rank projects, including the project’s national or regional
Clean Water State Revolving Fund (SRF) and Drinking
significance with respect to economic and public benefits,
Water SRF. For FY2019, combined appropriations for the
creditworthiness, and readiness.
SRF programs totaled $2.85 billion. In both programs, EPA
uses funds to provide grants to states to capitalize their SRF
To be eligible for WIFIA, projects generally must exceed
loan programs. States use their federal grant to leverage
$20 million. For small communities (defined as 25,000
resources (e.g., issue bonds) and to provide assistance
people or less), eligible projects must exceed $5 million.
(primarily subsidized loans) to public water systems and
WIFIA directs EPA to set aside 15% of each WIFIA
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link to page 2 WIFIA Program: Background and Recent Developments
appropriation for assistance to projects that serve small
one letter of credit. AWIA also requires EPA to review and
communities. If those funds remain unobligated by June 1
approve or provide guidance on WIFIA projects submitted
of that fiscal year, the set-aside may be used for any project.
by SIFAs within 180 days. AWIA prohibits repayment of
WIFIA assistance from federal SRF capitalization grants.
To spur private investment, WIFIA assistance can generally
support no more than 49% of project costs; however, EPA
AWIA further amends WIFIA to authorize EPA to enter
may use as much as 25% of appropriated funds to provide
into agreements with relevant federal agencies to administer
assistance in excess of 49% of project costs. Total federal
and service loans that such agencies are authorized to make.
assistance, including from WIFIA, may not exceed 80% of
AWIA Section 4301 directs EPA and the Department of the
a project’s costs, with some exceptions.
Interior’s Bureau of Reclamation to enter into such an
agreement. Such agreements may avoid duplication of
The Trump Administration’s FY2019 budget requested $20
WIFIA-related administrative functions across agencies.
million for EPA’s WIFIA program, while Congress
provided $68 million (P.L. 116-6). For FY2020, the
EPA Implementation
Administration requested $25 million for WIFIA, of which
For each year that Congress appropriates funds for WIFIA
$20 million would support credit subsidies. See Table 1 for
subsidies, EPA publishes a Notice of Funding Availability
FY2017, FY2018, FY2019 appropriations, subsidy costs,
(NOFA) that provides interested entities with WIFIA
and estimated loan potential. In WIFIA appropriations,
application information. In each NOFA, EPA identifies
Congress has specified amounts both for loan subsidy costs
additional considerations for project prioritization (e.g.,
and EPA program administration costs.
repairing aging infrastructure and addressing drinking water
contamination). The NOFA invites entities to submit a
Table 1. WIFIA Appropriations, Subsidy Costs, and
letter that validates the eligibility of the entity and project,
Estimated Loan Potential
provides preliminary engineering assessments and
prospective borrower information, and evaluates the
Fiscal
Subsidy
Estimated
proposed project against the NOFA’s selection criteria.
Year
Appropriation
Costs
Loan Capacity

(nominal $ in millions (not adjusted for inflation))
Based on the submitted letters of interest, EPA invites
selected entities to submit an application to EPA within one
2017
$30
$25
$1,000
year. The application must contain information on the
prospective project, including a comprehensive financing
2018
$63
$55
$5,500
plan, maintenance and operation plan, and an assessment of
2019
$68
$60
$7,310
the project’s creditworthiness, among other details. For
SRF-eligible projects, WIFIA requires EPA to notify the
Source: Compiled by CRS using enacted appropriations, EPA loan
relevant state infrastructure financing authority to give
capacity estimates, and loan capacity estimate in conference report
states the opportunity to fund the project through the SRF.
H.Rept. 116-9, that accompanied P.L. 116-6.
Amendments in the 115th Congress
EPA began issuing WIFIA loans in 2018. In response to the
FY2017 NOFA, EPA received 43 letters of interest
Congress amended WIFIA in AWIA (P.L. 115-270) to
requesting a total of $6 billion in loans. Of the 43 letters,
remove the pilot designation from the program, extend the
EPA selected sponsors of 12 projects (drinking water and
authorization of appropriations for EPA, and revise several
wastewater infrastructure, stormwater management, and
program administration provisions.
water recycling) in 9 states; EPA invited these project
sponsors to apply for loans totaling $2.3 billion. As of April
AWIA authorizes EPA appropriations of $50 million for
2019, eight of these projects have closed on their loans.
FY2020 and FY2021. For each of these years, AWIA
Section 4201 increases the amount of authorized
In response to the FY2018 NOFA, EPA received 62 letters
appropriations that EPA can use for administrative
of interest requesting $9.1 billion in WIFIA loans. The
purposes—including technical assistance to help sponsors
majority of the interested entities are municipal agencies
obtain necessary approvals—from $2.2 million to $5.0
requesting funds for wastewater and drinking water
million.
infrastructure, water recycling, desalination, and stormwater
management. In November 2018, EPA invited 39 projects
Several revisions to the WIFIA program address SIFAs’ use
totaling $5.5 billion in 16 states and the District of
of WIFIA financial assistance. AWIA authorizes an
Columbia to apply for WIFIA loans. As of April 2019, EPA
appropriation of additional $5.0 million for each of FY2020
had received one application for these selected projects.
and FY2021 for WIFIA assistance to SIFAs to support
combined projects eligible for assistance from the SRFs,
EPA released the FY2019 NOFA to solicit letters of interest
under specified conditions. AWIA further authorizes SIFAs
for WIFIA loans on April 5, 2019.
to finance 100% of project costs with WIFIA assistance.
AWIA clarifies that SIFAs cannot pass WIFIA application
Elena H. Humphreys, Analyst in Environmental Policy
fees on to parties that utilize the assistance. Prior to AWIA,
IF11193
WIFIA projects required two letters of credit from rating
agencies. AWIA authorizes projects from SIFAs to supply

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WIFIA Program: Background and Recent Developments



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