WIFIA Solutions for Needing Alternative Funding

I can’t get what I need from traditional funding sources.

There are many options for funding water infrastructure projects, and each option has different benefits, timelines, and requirements. It can be challenging to navigate these various requirements and determine which option best meets the community’s needs. Furthermore, more customized funding options may be possible but often cost the community more money through additional fees or increased interest rates.

How Can WIFIA Funding Help?

The WIFIA program offers several benefits that aren’t traditionally offered with other financing sources, including low interest rates, customized debt structuring, and post-loan closing flexibilities – all available to borrowers without increasing their interest rate. These options provide borrowers with creative, affordable options they might not find elsewhere.

• Interest Rate Set to AAA Treasury Yields: Regardless of the borrower’s investment-grade credit rating, WIFIA interest rates are solely determined by the Treasury rate on the date of loan closing. This benefit saves many borrowers money compared to rates they might receive in the bond market.
• Interest Accrual Flexibility: A WIFIA loan is a cost-reimbursement loan. Interest does not accrue until the borrower draws against the loan. Once incurred costs are reimbursed, the borrower will start to accrue interest, but only on the amount of money disbursed. This is a meaningful benefit to WIFIA borrowers because disbursements can be requested and interest accrued only when funds are needed.
• Works Within Existing Debt Structures: In most cases, the WIFIA program can work within a borrower’s existing debt structure and provide loan structuring flexibility. As long as other project debt is on a subordinate lien, the WIFIA loan can also be placed on a subordinate lien at the same price as a senior lien. Furthermore, the WIFIA program can work with the borrower to slot the WIFIA loan within the borrower’s existing indenture, simplifying debt monitoring. The WIFIA program can accept multiple types of revenue pledges, including system revenues, general obligation bonds, or taxes.
• Amortization and Draw Schedule Adjustments: After loan closing, borrowers might be interested in adjusting their loan amortization and draw schedules to address schedule or project changes. The WIFIA program will work with borrowers who request restructuring of amortization and draw schedules if there are changes to project costs, schedule, or funding sources. This option helps borrowers wrap WIFIA loans around other funding sources and create a flexible repayment schedule that meets their needs.

Hear What Our Borrowers Are Saying:

“Silicon Valley Clean Water is grateful for the EPA’s partnership in helping to finance one of the largest infrastructure projects in history by a local Bay Area agency. Our ratepayers benefit from the low interest rates and flexible debt structures offered by the WIFIA Loan program.” – Alicia Aguirre, Chairperson (2023), Silicon Valley Water District, California