Investing in America’s Water Infrastructure – Answering the “How to Pay?” Question
By Jim Gebhardt, CFA
Clean and reliable water is critical for life and, as our Administrator recently said, “needs to be available to everyone—no matter what part of the country you live, no matter how much money you make, and no matter the color of your skin.” Yet, despite the notion of water as an inalienable right and that most Americans value well-run drinking water and wastewater delivery systems, communities across the country continue to struggle with setting up adequate and sustainable revenue structures required to support needed infrastructure investment and system management.
That’s why we launched our Water Infrastructure and Resiliency Finance Center last year to explore leading-edge solutions to funding and revenue challenges, and identify and support best practices.
As I blogged about earlier, EPA’s Clean Water State Revolving Fund and Drinking Water State Revolving Fund has provided more than $141 billion in low-interest loans to state and local water infrastructure projects since 1987. Today these state-run programs operate with almost $60 billion in program equity that will continue to be available to support sustainable lending programs.
Looking ahead, we see lots of opportunities for states to support market-based solutions that address stormwater mitigation challenges, source water protection, on-site wastewater management, and marketplaces for nutrient pollution credit trading. It’s also encouraging to see some states exploring how their triple-A credit rating can be used to guarantee debt and provide additional credit access to stimulate these kind of water quality investments.
But we aren’t stopping there.
We’re looking at emerging and promising finance mechanisms that address water quality and quantity challenges such as Pay for Success, Pay for Performance, green bonds, energy and water performance contracting, water quality trading, and conservation financing strategies.
We’re researching procurement and funding strategies associated with public-private and public-public partnerships in the water sector.
We’re working with the Environmental Finance Center at the University of North Carolina to develop public-private and public-public project (P3) profiles and an evaluation tool to help local officials determine if there is value in pursuing P3 opportunities in their community.
We’re busy developing a water finance information clearinghouse. The first portal will provide up to date information on stormwater management frameworks, funding and revenue solutions. We plan to launch the portal this fall.
No matter where you live, we are here to help. We also invite you to attend one of our upcoming engagement opportunities:
Environmental Financial Advisory Board meeting: On August 9 and 10 the Environmental Financial Advisory Board will meet in Denver, Colorado, to discuss ideas and advice to provide EPA on ways to lower the costs of and increase investments in environmental and public health protection.
Regional Finance Forums: EPA’s Water Infrastructure and Resiliency Finance Center will continue hosting regional forums across the country to bring together communities with water infrastructure financing needs to network, hear local success stories from peers, and have an opportunity to meet key regional funding and technical assistance contacts. Check out our website for upcoming dates and locations.
About the author: Jim Gebhardt is the director for EPA’s Water Infrastructure and Resiliency Finance Center. The Center identifies financing approaches for public health and environmental goals by providing financial expertise to help communities make better-informed decisions about drinking water, wastewater, and stormwater infrastructure.
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