[Federal Register Volume 88, Number 184 (Monday, September 25, 2023)]
[Notices]
[Pages 65671-65674]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-19688]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL 11258-01-OW]


Notice of Funding Availability for Credit Assistance Under the 
Water Infrastructure Finance and Innovation Act (WIFIA) Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of funding availability.

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SUMMARY: The purpose of this notice of funding availability (NOFA) is 
to solicit letters of interest (LOIs) from prospective borrowers 
seeking credit assistance from the U.S. Environmental Protection Agency 
(EPA) under the Water Infrastructure Finance and Innovation Act (WIFIA) 
program. EPA estimates that it may lend approximately $6.5 billion to 
help finance approximately $13 billion in water infrastructure 
investment.

DATES: LOIs submitted after October 25, 2023 will be reviewed using the 
scoring criteria outlined in this NOFA.

ADDRESSES: Prospective borrowers should submit all LOIs electronically 
via EPA's SharePoint site. To be granted access to the SharePoint site, 
prospective borrowers should contact [email protected] and request a link 
to the SharePoint site, where they can securely upload their LOIs and 
then email [email protected] once the complete LOI package has been 
uploaded to the SharePoint site. EPA will notify prospective borrowers 
that their LOI has been received via a confirmation email.
    Prospective borrowers can access additional information, including 
the WIFIA program handbook and application materials, on the WIFIA 
website: https://www.epa.gov/wifia/.

FOR FURTHER INFORMATION CONTACT: Dallas Shattuck, Office of Water, 
Environmental Protection Agency; telephone number: (202) 564-0972; or 
email: [email protected] (preferred).

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Background
II. Program Funding
III. Eligibility Requirements
IV. Budgetary Scoring Determination for Non-Federal Projects
V. Type and Amount of Credit Assistance
VI. Letters of Interest and Applications
VII. Fees
VIII. Selection Criteria
IX. Federal Requirements

I. Background

    Congress enacted WIFIA as part of the Water Resources Reform and 
Development Act of 2014 (WRRDA). Codified at 33 U.S.C. 3901-3915, WIFIA 
authorizes a Federal credit program for water infrastructure projects 
to be administered by EPA. WIFIA authorizes EPA to provide Federal 
credit assistance in the form of secured (direct) loans or loan 
guarantees for eligible water infrastructure projects.
    The WIFIA program's mission is to accelerate investment in our 
nation's water, wastewater, and stormwater infrastructure by providing 
long-term, low-cost, supplemental credit assistance under customized 
terms to creditworthy water infrastructure projects of national and 
regional significance. Additionally, the WIFIA program is implementing 
five key Administration priorities in this 2023 NOFA:

A. Increasing Investment in Economically Stressed Communities

    EPA encourages the submission of projects that address the ever-
increasing needs of economically stressed and disadvantaged communities 
to ensure they benefit from investments in water infrastructure, and 
therefore improve the public health and livability of these 
communities.

B. Making Rapid Progress on Lead Service Line Replacement

    Many drinking water systems still have lead service lines. EPA 
encourages the submission of drinking water infrastructure projects 
that will help make rapid progress on replacing lead service lines to 
reduce exposure to lead and improve public health. There is no safe 
level of lead in drinking water. Full lead service line replacement can 
be an

[[Page 65672]]

effective method to reduce drinking water lead levels. Because of this, 
WIFIA-funded projects involving lead service line replacement should 
include a plan, strategy, and/or approach to comply with EPA policy on 
lead service line replacement.

C. Addressing PFAS and Emerging Contaminants

    EPA encourages the submission of projects that focus on reducing 
exposure to perfluoroalkyl and polyfluoroalkyl substances (PFAS) and 
other emerging contaminants through drinking water and/or projects that 
help address discharges of emerging contaminants from wastewater and/or 
stormwater systems.

D. Mitigating the Impacts of Drought

    EPA supports long-term strategies to conserve water, promote water 
efficiency and reuse, and protect and diversify communities' sources of 
water. Taken together, these efforts can help communities address water 
quantity concerns and reduce their reliance on single sources for 
drinking water. Due to the WIFIA program's broad range of eligible 
projects, EPA can finance projects such as aquifer storage and 
recovery, water reuse, green infrastructure, stormwater diversion and 
storage, water loss audits, meter replacement, groundwater 
replenishment, and nature-based solutions.

E. Supporting One Water Innovation and Resilience

    One of the defining features of WIFIA is the broad range of 
eligible projects that EPA can fund to flexibly support priority needs. 
EPA encourages borrowers to submit applications for water 
infrastructure projects that are new and innovative in regards to 
energy efficiency, addressing drought, or reducing water pollution and 
contaminants. In addition, EPA encourages the submission of water 
infrastructure projects that are more resilient to all threats--whether 
it is natural disasters, climate change, or threats such as 
bioterrorism and cyber-attacks.

II. Program Funding

A. WIFIA Program Appropriation

    In the Consolidated Appropriations Act, 2023, signed by the 
President on December 29, 2022, Congress appropriated $63 million in 
funding to cover the subsidy cost of providing WIFIA credit assistance. 
EPA estimates that this appropriation will allow the Agency to provide 
approximately $6.5 billion \1\ in long-term, low-cost financing to 
water infrastructure projects and accelerate approximately $13 billion 
in infrastructure investment around the country.
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    \1\ This estimated loan volume is provided for reference only. 
Consistent with the Federal Credit Reform Act of 1990 and the 
requirements of the Office of Management and Budget, the actual 
subsidy cost of providing credit assistance is based on individual 
project characteristics and calculated on a project-by-project 
basis. Thus, actual lending capacity may vary.
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B. Funding Availability Period

    LOIs may be submitted by prospective borrowers and will be reviewed 
by EPA on a rolling basis. LOIs shall be submitted using the LOI form 
found at https://www.epa.gov/wifia. LOIs will be reviewed based on the 
scoring guide applicable at the time of submission. The publication of 
this NOFA does not impact LOIs previously submitted to EPA, which 
continue to be reviewed based on the applicable requirements at the 
time of submission.
    LOIs submitted after October 25, 2023 will be reviewed using the 
scoring criteria outlined in this NOFA. This NOFA provides guidance on 
all WIFIA funding authority available including funding from previous 
years. Any funding authority not obligated in the fiscal year for which 
it is authorized remains available for obligation in subsequent years.

III. Eligibility Requirements

    The WIFIA statute and implementing rules provide eligibility 
requirements for prospective borrowers, projects, and project costs. In 
general, the WIFIA program can provide loans to public and private 
borrowers for a wide variety of water infrastructure projects. Detailed 
information on WIFIA eligibility requirements for prospective 
borrowers, projects, and project costs can be found in the WIFIA 
program handbook at https://www.epa.gov/wifia/wifia-program-handbook.

A. Eligible Applicants

    Prospective borrowers must be an eligible entity to receive WIFIA 
credit assistance. Eligible entities include: corporations, 
partnerships, joint ventures and trusts; state, local, and tribal 
governments; and state infrastructure financing authorities.
    Public sponsorship is required for projects undertaken by an entity 
that is not a state or local government or agency or instrumentality of 
a state or local government, or a tribal government or consortium of 
tribal governments.

B. Eligible Projects

    The WIFIA statute authorizes EPA to provide credit assistance for a 
wide variety of creditworthy drinking water, wastewater, and stormwater 
infrastructure projects. The non-exhaustive list below includes several 
examples of projects eligible for WIFIA credit assistance. For detailed 
project eligibility information, review the WIFIA program handbook at 
https://www.epa.gov/wifia/wifia-program-handbook.
     A wide range of wastewater, stormwater, and nonpoint 
source projects that are eligible under the Clean Water State Revolving 
Fund (CWSRF). More detailed CWSRF eligibility information can be found 
at https://www.epa.gov/cwsrf;
     A wide range of drinking water infrastructure projects--
including treatment, transmission and distribution, source, storage, 
consolidation/partnerships, and the creation of new systems--that are 
eligible under the Drinking Water State Revolving Fund (DWSRF). More 
detailed DWSRF eligibility information can be found at https://www.epa.gov/dwsrf;
     Repair, rehabilitation, or replacement of drinking water, 
wastewater, or stormwater infrastructure;
     Energy efficiency enhancements for a public water system 
or publicly owned treatment works;
     Desalination, aquifer storage and recovery, water 
recycling, or other projects to provide an alternative water supply and 
reduce aquifer depletion;
     Drought prevention, reduction, or mitigation projects;
     Acquisition of real property or an interest in real 
property, in certain circumstances;
     A combination of drinking water and wastewater projects 
submitted by a State infrastructure financing authority; and
     A combination of eligible projects, secured by a common 
security pledge, for which a single entity, or a combination of 
eligible entities, submits a single application.

C. Eligible Costs

    Eligible project costs are costs associated with the following 
activities:
    (i) Development-phase activities, including planning, feasibility 
analysis (including any related analysis necessary to carry out an 
eligible project), revenue forecasting, environmental review, 
permitting, preliminary engineering and design work, and other 
preconstruction activities;

[[Page 65673]]

    (ii) Construction, reconstruction, rehabilitation, and replacement 
activities;
    (iii) The acquisition of real property or an interest in real 
property (including water rights, land relating to the project, and 
improvements to land), environmental mitigation, construction 
contingencies and acquisition of equipment;
    (iv) Capitalized interest necessary to meet market requirements, 
reasonably required reserve funds, capital issuance expenses, and other 
carrying costs during construction. Capitalized interest on WIFIA 
credit assistance may not be included as an eligible project cost.

IV. Budgetary Scoring Determination for Non-Federal Projects

    To comply with Public Law 116-260, a project selected for WIFIA 
financing using funding appropriated in FY2023 will be assessed using 
two initial screening questions and sixteen scoring factors. These 
questions will help the Office of Management and Budget (OMB) determine 
compliance with budgetary scoring rules, a process that will be 
conducted in parallel to EPA's LOI evaluation process outlined in this 
NOFA. The questions may be found in Federal Register publication: Water 
Infrastructure Finance and Innovation Act Program (WIFIA) Criteria 
Pursuant to the Further Consolidated Appropriations Act, 2020 (85 FR 
39189, June 30, 2020). These questions are also published in the WIFIA 
program handbook and further information about the scoring process may 
be referenced therein. EPA encourages project applicants to review the 
scoring criteria and provide sufficient information in the LOI or as an 
attachment to the LOI to facilitate EPA and OMB review of the 
prospective project considering the scoring criteria.

V. Type and Amount of Credit Assistance

    Under this NOFA, EPA will provide credit assistance in the form of 
direct loans or loan guarantees. Each prospective borrower should list 
the estimated total capital costs of the project broken down by 
activity type.

A. Minimum Project Costs

    Projects must have eligible costs that are reasonably anticipated 
to be equal to or exceed $20 million, or for small communities (serving 
not more than 25,000 individuals), project costs that are reasonably 
anticipated to equal or exceed $5 million.

B. Maximum Amount of WIFIA Credit Assistance

    The maximum amount of WIFIA credit assistance to a project is 49% 
of eligible project costs in almost all instances. EPA may offer small 
community prospective borrowers credit assistance up to 80% of the 
eligible project costs.

C. Appropriation Set-Aside for Small Communities

    EPA will endeavor to use 15% of its budget authority for small 
communities. Recognizing the need that exists in both small and large 
communities to invest in infrastructure, the WIFIA statute requires 
that EPA set aside 15% of the budget authority appropriated each year 
for small communities, defined as systems that serve a population of 
25,000 or less. Of the funds set aside, any amount not obligated by 
June 1 of the fiscal year for which budget authority is set aside may 
be used for any size community.

VI. Letters of Interest and Applications

    Each prospective borrower will be required to submit an LOI and, if 
invited, an application to EPA to be considered for approval. This 
section describes the LOI submission and application submission.

A. Letter of Interest (LOI)

    Prospective borrowers seeking a WIFIA loan must submit an LOI 
describing the project fundamentals and addressing the WIFIA selection 
criteria. Prospective borrowers can find more information on the LOI at 
https://www.epa.gov/wifia.
    The primary purpose of the LOI is to provide adequate information 
to EPA to: (i) determine the eligibility of the prospective borrower 
and the prospective project, (ii) perform a preliminary 
creditworthiness assessment, (iii) perform a preliminary engineering 
feasibility assessment, and (iv) evaluate the project against the 
selection criteria. Based on its review of the information provided in 
the LOI, EPA will invite prospective borrowers to submit applications 
for their projects. Prospective borrowers are encouraged to review the 
WIFIA program handbook at https://www.epa.gov/wifia/wifia-program-handbook to help create the best justification possible for the project 
and a cohesive and comprehensive LOI submittal.
    Prospective borrowers must utilize the WIFIA LOI form and follow 
the guidelines contained on the WIFIA program website: https://www.epa.gov/wifia. Prospective borrowers should provide the LOI and any 
attachments as Microsoft Word documents or searchable PDF files, 
whenever possible, to facilitate EPA's review. Additionally, 
prospective borrowers must ensure that financial information, including 
the pro forma financial statement, is in a formula-based Microsoft 
Excel document. Prospective borrowers should provide sufficient detail 
about the project for EPA's review. EPA will notify a prospective 
borrower if its project is deemed ineligible as described in section 
III of this document or if additional information is needed to assess 
the LOI package.

B. Application

    After EPA concludes its evaluation of a complete LOI package, a 
selection committee will invite the prospective borrower to apply based 
on review and scoring, as applicable, of the selection criteria and 
satisfaction of the eligibility requirements. The selection committee 
may choose to combine multiple LOIs or separate projects from a 
prospective borrower based on the creditworthiness review and may offer 
an alternative amount of WIFIA assistance than requested in the LOI. 
Final applications should be received by EPA within 365 days of the 
invitation to apply, but EPA may extend the deadline on a case-by-case 
basis if the LOI schedule signals additional time may be needed.
    An invitation to apply for WIFIA credit assistance does not 
guarantee EPA's approval, which remains subject to a project's 
continued eligibility, including creditworthiness, the successful 
negotiation of terms acceptable to EPA, and the availability of funds 
at the time at which all necessary recommendations and evaluations have 
been completed. However, the purpose of EPA's LOI review is to pre-
screen prospective borrowers to the extent practicable. It is expected 
that EPA will only invite prospective borrowers to apply if it 
anticipates that those prospective borrowers are able to obtain WIFIA 
credit assistance. Detailed information needs for the application are 
listed in the application form at https://www.epa.gov/wifia and 
described in the WIFIA program handbook.

VII. Fees

    There is no fee to submit an LOI. For information about application 
and post-closing costs, please refer to the WIFIA program handbook.

VIII. Selection Criteria

    This section specifies the criteria and process that EPA will use 
to evaluate LOIs and award applications for WIFIA assistance.

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    EPA will evaluate and select proposed projects described in the 
LOIs using the selection criteria established in the statute and 
regulation, and the Administration priorities identified in section I 
of this document. EPA's priorities reflect water sector challenges that 
require innovative tools to assist borrowers in managing and adapting 
to our most pressing public health and environmental challenges. These 
priorities are reflected in the scoring methodology of the selection 
criteria below and described in greater detail in the WIFIA program 
handbook.
    The WIFIA selection criteria are divided into three categories: 
Project Readiness, Borrower Creditworthiness, and Project Impact. Each 
LOI will be evaluated for the extent to which the project satisfies the 
criteria listed below for each category. To satisfy the overall 
category review, it is not necessary to satisfy all criteria for each 
category. For the Project Impact category, WIFIA staff will score LOIs 
based on the points indicated below. All projects that satisfy 
category-level review for all three categories will be selected for 
funding, assuming sufficient funds are still available. The criteria 
are as follows:
    Project Readiness:
    (i) The readiness of the project to proceed toward development, 
including a demonstration by the obligor that there is a reasonable 
expectation that the contracting process for construction of the 
project can commence by not later than 90 days after the date on which 
a Federal credit instrument is obligated for the project under WIFIA.
    (ii) Preliminary engineering feasibility analysis.
    Borrower Creditworthiness:
    (i) The likelihood that assistance under WIFIA would enable the 
project to proceed at an earlier date than the project would otherwise 
be able to proceed.
    (ii) The extent to which the project financing plan includes public 
or private financing in addition to assistance under WIFIA.
    (iii) The extent to which assistance under WIFIA reduces the 
contribution of Federal assistance to the project.
    (iv) The amount of budget authority required to fund the Federal 
credit instrument made available under WIFIA.
    (v) Preliminary determination of prospective borrower and project 
creditworthiness.
    Project Impact:
    (i) 10 points: The extent to which the project is nationally or 
regionally significant, with respect to the generation of economic and 
public benefits, such as (1) the reduction of flood risk; (2) the 
improvement of water quality and quantity, including aquifer recharge; 
(3) the protection of drinking water, including source water 
protection; and (4) the support of international commerce.
    (ii) 15 points: The extent to which the project (1) protects 
against extreme weather events, such as floods, hurricanes or drought; 
or (2) helps maintain or protect the environment, including Priority D.
    (iii) 5 points: The extent to which the project serves regions with 
significant energy exploration, development, or production areas.
    (iv) 10 points: The extent to which a project serves regions with 
significant water resource challenges, including the need to address: 
(1) water quality concerns in areas of regional, national, or 
international significance; (2) water quantity concerns related to 
groundwater, surface water, or other water sources; (3) significant 
flood risk; (4) water resource challenges identified in existing 
regional, state, or multistate agreements; or (5) water resources with 
exceptional recreational value or ecological importance.
    (v) 5 points: The extent to which the project addresses identified 
municipal, state, or regional priorities.
    (vi) 10 points: The extent to which the project addresses needs for 
repair, rehabilitation or replacement of a treatment works, community 
water system, or aging water distribution or wastewater collection 
system.
    (vii) 15 points: The extent to which the project serves 
economically stressed communities, or pockets of economically stressed 
rate payers within otherwise non-economically stressed communities, 
including Priority A.
    (viii) 15 points: The extent to which the project reduces exposure 
to lead in the nation's drinking water systems or addresses emergent 
contaminants, including Priorities B and C.
    (ix) 15 points: The extent to which the project uses new or 
innovative approaches, including Priority E.
    The scoring scales and guidance used to evaluate each project 
against the selection criteria are available in the WIFIA program 
handbook. Prospective borrowers considering WIFIA should review the 
WIFIA program handbook and discuss how the project addresses each of 
the selection criteria in the LOI submission.

IX. Federal Requirements

    All projects receiving WIFIA assistance must comply with the 
applicable Federal requirements. Compliance with Federal requirements 
is not required for submitting a letter of interest, being invited to 
apply for a WIFIA loan, or submitting an application. The WIFIA program 
will review selected projects for compliance with Federal requirements 
once they have submitted an application. Additional information about 
Federal compliance requirements is available in the WIFIA program 
handbook and at https://www.epa.gov/wifia/wifia-federal-compliance-requirements.

X. Opportunities To Learn More About the WIFIA Program

    EPA hosts regular outreach events and monthly office hours to 
provide further information about submitting an LOI. The outreach 
schedule and registration instructions can be found on the WIFIA 
program website: www.epa.gov/wifia.
    Prospective borrowers with questions about the program or interest 
in meeting with the WIFIA program staff may send a request to 
[email protected]. EPA will meet with all prospective borrowers interested 
in discussing the program prior to submission of an LOI.
    Authority: 33 U.S.C. 3901-3915; 40 CFR part 35.

Michael S. Regan,
Administrator.
[FR Doc. 2023-19688 Filed 9-22-23; 8:45 am]
BILLING CODE 6560-50-P