Water Infrastructure and Resiliency Finance Center

Leading Edge Financing for Water Infrastructure

The Water Infrastructure and Resiliency Finance Center encourages state-of-the-art financing to increase investment in drinking water and wastewater infrastructure. The Center is working with states to increase innovation in the Clean Water State Revolving Fund (CWSRF) and Drinking Water State Revolving Fund (DWSRF) programs by developing an SRF Peer-to-Peer Learning Network and working directly with interested states.

State Revolving Fund Management

The CWSRF and DWSRF programs are the nation's largest water quality financing source, providing:

  • $133 billion in low-cost financial assistance to local governments and other qualified entities over the last 25 years.
  • Funding for construction and repair of facilities critical to the nation’s clean water and safe drinking water goals.

The nation faces large and growing water and wastewater infrastructure needs. There are several ways that SRF dollars can help meet the demand including expanded project eligibilities, use of guarantees, and leveraging.

SRF Project Eligibilities

Using Guarantees in SRF Programs

SRF administrators can use the guarantee authority to expand funding capacity without reducing current levels of lending activity. In 2014, the U.S. EPA Financial Advisory Board released a report that suggested an untapped guarantee capacity totaling billions, Utilizing SRF Funding For Green Infrastructure Projects (PDF)(61 pp, 1.1 MB, About PDF).

An example of how a guarantee was used in the CWSRF program:

New York State Environmental Facilities Corporation Guarantee Allows Affordable Energy Efficiency Funding Exit
The New York State Energy Research and Development Authority (NYSERDA) sold $24.3 million in revenue bonds to finance loans for energy efficiency improvements as part of its Green Jobs-Green New York Program.
  • These bonds were rated triple-A due to a guarantee from the New York State Environment Facilities Corporation (NYEFC).
  • NYSERDA uses the bond proceeds to finance consumer loans that will be used for the installation of residential energy efficiency improvements and Energy Star compliant products.
  • New York is the first state to use the SRF to support initiatives that address atmospheric depositions that impact public health and pollute critically important water bodies.

Leveraging within the SRF Program

State SRF programs can increase funds through different types of leveraging such as:

  • Using fund assets as collateral to issue tax-exempt revenue bonds;
  • Using funds from one SRF program to secure the other SRF program against default through cross-collateralization;
  • Using funds from one SRF program to help cure a default in the other SRF program through a short-term cross-investment; and
  • Increasing disbursements to incrementally fund multiple projects within a capital improvement plan.

Learn more about the different types of CWSRF assistance and DWSRF assistance.

Water Sector Partnerships

The Center provides information to communities interested in innovative financing partnerships.

Public-Public Partnerships

Public-public partnerships are an innovative solution to meet water infrastructure needs. A public-public partnership is a collaboration between two public utilities to improve the quality and efficiency of water or wastewater services.

  • Case Study: Lehigh County Authority takes over Allentown’s water system (PDF)(1 pp, 35 K, About PDF) Exit 
    In 2012, the City of Allentown’s efforts to boost revenue and cut costs were not enough to cover growing pension fund payments. The city needed a creative solution to raise revenue. Following a competitive bidding process, the city finalized a 50-year, $211.3 million lease of its drinking water and sewer systems in August 2013 to the Lehigh County Authority, a public water and wastewater utility. The upfront payment from the lease, as well as a $500,000 annual royalty payment, was used to pay off water and sewer bonds, cut the city’s debt, and eliminate unfunded pension liability.
  • Water Systems Partnerships
    This web page provides additional resources and case studies on forming partnerships between utilities.

Public-Private Partnerships

Due to the growing challenge of aging and inadequate water infrastructure, communities are seeking new ways to increase funding for water infrastructure. Public-private partnerships (P3s) provide communities with an innovative solution to meet their infrastructure needs. A P3 is a long-term contractual agreement between a public and private entity to provide high quality services in a cost effective way. P3s are varied and reflect the specific needs of the community.

Community Based Public-Private Partnerships and Alternative Market-Based Tools for Integrated Green Stormwater Infrastructure: A Guide for Local Governments(127 pp, 2.4 MB, About PDF)
EPA Region 3 and its partners developed this guide to identify tools to help Mid-Atlantic communities address water quality challenges through faster, cheaper, and greener methods.

Water projects recognized in the 2015 National Public-Private Partnership Awards from the National Council for Public-Private Partnerships (NCPPP):

Top of Page