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One Way Washington Could Move Forward on Infrastructure

The WIFIA federal loans program provides start-up capital to local water infrastructure projects. The program is designed to encourage experimentation and cost-effective construction strategies.
August 17, 2017, 8am PDT | Philip Rojc | @PhilipRojc
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Johnny Silvercloud

The Trump administration's infrastructure plan remains unclear, especially as press conferences on the subject devolve into controversial (to put it mildly) off-the-cuff remarks on national tragedies. Nevertheless, the Brookings Institution is still looking at how Washington could move forward on infrastructure, and it has identified the EPA's Water Infrastructure Finance and Innovation Act (WIFIA) program as a good bet.

Citing its bipartisan support, Joseph Kane writes, "WIFIA offers greater financial flexibility to a wide variety of utilities, municipalities, and other eligible entities who may lack the capacity to fund water infrastructure upgrades, by helping cover up to 49 percent of project costs and targeting large-scale improvements."

"Unlike federal grants, WIFIA loans depend more on the ability of borrowers to generate revenue, reduce investment risk, and consider other forms of private and nonfederal financing; as a result, it is estimated that the initial federal subsidy can drive more than $2 billion in water loans."

Kane concludes by qualifying all of this. "Time will tell how effective these loans can be in getting projects done nationally, but they mark a step in the right direction at a moment with little to no infrastructure leadership in Washington."

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Published on Monday, July 24, 2017 in Brookings
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