6 minute read
USACE Launches $7.5 Billion Financing Program
BY NATHAN CAMPBELL
The Corps Water Infrastructure Financing Program has $7.5 billion in financing available to support non-federal dam infrastructure investments across the United States.
The U.S. Army Corps of Engineers (USACE) has established a new federal credit program – referred to as the Corps Water Infrastructure Financing Program (CWIFP) – that will provide credit assistance to non-federal dam safety projects. CWIFP, opened to the public in September, is providing lowcost, long-term, flexible financing options to support investments in the nation’s non-federal dams. This program will accelerate non-federal investment and enable significant improvements to the nation’s dam infrastructure.
There are more than 88,000 non-federal dams in the United States, and most of these dams are on average more than 50 years old. According to a recent Association of State Dam Safety Officials (ASDSO) report titled, “The Cost of Rehabilitating Dams in the U.S.: A Methodology and Estimate,” the number of high hazard-potential dams, where loss of life is probable should the dam fail, has increased almost 20% over the past 10 years, to more than 16,000. From January 2005 to June 2013, states reported 173 dam failures and 587 “incidents” representing episodes that, without intervention, would likely have resulted in a failure.
To help tackle this challenge, USACE published the final implementation rule in the Federal Register (www.federalregister.gov/documents/2023/05/22/2023-10520/ credit-assistance-and-related-fees-for-water-resources-infrastructure-projects) in May 2023 and now, through the publication of the first CWIFP Notice of Funding Availability (NOFA) (www.federalregister.gov/documents/2023/09/20/2023-20286/notice-of-funding-availability-for-applications-for-credit-assistance-under-the-corps-water), USACE is ready to accept applications at www.usace.army.mil/CWIFP for credit assistance.
“The Corps Water Infrastructure Financing Program provides a new and significant tool that can be used to keep the nation’s infrastructure resilient and dependable for multiple generations. As we deal with unprecedented climate challenges that require robust and effective infrastructure, this new financing program will enable continued investment by our local communities in their infrastructure,” said Michael Connor, the assistant secretary of the Army for Civil Works.
As detailed in the NOFA, this competitive solicitation will be open for 90 days, and is a no-cost opportunity for non-federal entities to request financing from USACE to support safety projects to maintain, upgrade, repair, or remove non-federal dams. CWIFP will facilitate local investments in projects that enhance community resilience to floods, promote economic prosperity, and improve environmental quality.
BENEFITS TO BORROWERS
CWIFP offers significant benefits to its borrowers by offering low-cost flexible financing options that can be tailored to meet the specific needs of the community. The low interest rates, disbursement flexibilities, and customizable repayment schedules can provide tremendous savings to taxpayers.
CWIFP ELIGIBILITY
Broadly, projects to maintain, upgrade, repair, and remove dams owned by non-federal entities are eligible for CWIFP. This can include state-of-good-repair work, dam removals, and upgrades that improve the overall condition of dam or reduce safety risks on downstream dams. Projects must also be deemed creditworthy, technically sound, economically justified, environmentally acceptable, cost $20 million or more (applicants may bundle smaller projects together to reach a $20 million minimum), and comply with relevant federal laws and regulations.
CWIFP can provide loans up to 80% of a project’s costs for borrowers serving economically disadvantaged communities. Projects that do not serve economically disadvantaged communities are limited to 49% of project costs.
APPLICATION PROCESS
The application process includes a preliminary application, a full application, and concludes with a loan agreement. There is no cost to submit a preliminary application. The loan-processing time line is expected to take one to two years from the preliminary application to loan close, so prospective borrowers are encouraged to apply early in their project development to ensure that they have the funds on hand when they are needed.
USACE will review all preliminary applications and invite those that are eligible, subject to availability of funds, to submit a full application. Those invited to submit a full application will have 60 days to accept or decline the invitation and to pay the $25,000 full application fee, unless their project serves an economically disadvantaged community, in which case the application fee is waived. Those who accept the invitation to apply will have 365 days to complete their full application. Once a full application is submitted, the CWIFP team will review it and work to negotiate the term sheet and loan agreement within 30 to 90 days. After an agreement is reached on the terms of the CWIFP credit assistance, it will take approximately 30 days to close the loan and execute the loan agreement.
APPLICATION PORTAL
USACE will be collecting applications through a new, easy to use, online portal which can be accessed at CWIFPapp.usace.army.mil. It is a convenient one-stop shop containing a secure online form, where borrowers can also upload documents required as part of the loan application. To be able to fill out the forms on the application portal, prospective borrowers will need to register for the portal and subsequently be granted access from the CWIFP team.
WANT TO KNOW MORE?
Federal financing programs are extremely efficient and have a low cost to federal taxpayers, while providing significant savings to local taxpayers and ratepayers who directly rely on this critical nonfederal infrastructure. This program represents a significant investment by the federal government in improving our nation’s non-federal dam infrastructure.
The CWIFP team is available to discuss specific projects, questions on eligibility, and the application process. The team is happy to meet one on one with prospective borrowers, and can be reached via email at CWIFP@usace.army.mil to set up a meeting or click the “Contract Us” button provided on both the application portal and the CWIFP website (www.usace.army.mil/CWIFP).
