The U.S. Environmental Protection Agency (EPA) has announced $1.9 billion in grant funding to the State Revolving Funds (SRF) to accelerate progress on water infrastructure projects. Combined with historic investments through the Infrastructure Investment and Jobs Act, this funding will help states, Tribes, and territories upgrade water infrastructure to provide safe drinking water, protect vital water resources, and create new thousands of jobs in communities across the country.
“Our nation’s water infrastructure is in significant need of upgrades to support communities that rely on it day-in and day-out. With this funding provided through annual appropriations, coupled with investments under the Bipartisan Infrastructure Law, EPA is providing $9.6 billion in the SRFs to deliver the benefits of water infrastructure investments to more communities—especially those that have long been overburdened by water challenges,” said EPA Assistant Administrator for Water Radhika Fox.
In 2022, EPA is providing approximately $3.2 billion to the Clean Water SRFs, including $1.2 billion in new base federal grant funding being announced in May and $2 billion through the Infrastructure Investment and Jobs Act. This total investment represents a near doubling of annual investment in the Clean Water SRF to support a wide range of water infrastructure projects, including modernizing aging wastewater infrastructure, implementing water reuse and recycling, and addressing stormwater. More than $47 million in direct grant funding is available to Tribes, certain U.S. territories, and the District of Columbia for infrastructure projects.
EPA is also providing $6.4 billion to the Drinking Water SRFs, including $728 million in new base federal grant funding announced in May and $5.7 billion through the infrastructure act. This total investment represents a six-fold increase in annual investment to help drinking water systems remove lead service lines, install treatment for contaminants, and improve system resiliency to natural disasters such as floods. More than $32 million in direct grant funding is available to Tribes, certain U.S. territories, and the District of Columbia to use for drinking water system upgrades.
“States are eager to put these annual Clean Water and Drinking Water State Revolving Funds to work in conjunction with the unprecedented funding provided for the SRFs under the Bipartisan Infrastructure Law and some states’ use of American Rescue Plan funding for water infrastructure. These combined funds will allow states to address critical infrastructure challenges and to support projects in communities across the country bringing significant public health and environmental benefits,” added Ben Grumbles, president of the Environmental Council of the States and Secretary of the Maryland Department of Environment.
EPA says it encourages states, Tribes, and territories to strategically deploy SRF funding through the infrastructure act alongside SRF base funding and other water infrastructure financing tools to make rapid progress on their most pressing needs. The agency says it is continuing to work with states, Tribes, and territories to ensure that disadvantaged communities fully benefit from historic investments in the water sector.
Under the Clean Water and Drinking Water State Revolving Fund programs, EPA provides funding to all 50 states and Puerto Rico to capitalize SRF loan programs. For the base programs, the states and Puerto Rico contribute an additional 20 percent to match the federal grants. The 51 SRF programs function like infrastructure banks by providing low-interest loans to eligible recipients for drinking water and clean water infrastructure projects. As the loan principal and interest are repaid over time, it allows the state’s Drinking Water SRF or Clean Water SRF to be recycled or “revolve.” As money is returned to the state’s revolving loan fund, the state makes new loans to other eligible recipients. These funds can also be combined with BIL funding and EPA’s WIFIA loans to create a powerful, innovative financing solution for major infrastructure projects.