SWBNO selected for $111M federal WIFIA loan
For Immediate Release: Tuesday, October 22, 2019 2:15 PM
Major investment will help fund completion of sewer consent decree
New Orleans – The Sewerage and Water Board of New Orleans (SWBNO) sought and won access to a major federal water infrastructure loan to fund the full rehabilitation of New Orleans’ sanitary sewer system, the utility announced Tuesday, Oct. 22.
Under the Water Infrastructure Financing and Innovation Act (WIFIA) program, the Environmental Protection Agency (EPA) chose SWBNO to take part in its program, an effort that could yield up to $111 million to help the utility make its 2025 federal deadline to completely restore the sewer system. The EPA announced the award Tuesday, Oct. 22.
“This is a major milestone for our SWBNO team, our customers and New Orleans,” SWBNO Executive Director Ghassan Korban said. “That the EPA shows confidence in our ability to make good on our promises is a welcomed sign that this utility is heading in the right direction. The completion of our sewer system puts us in a great position toward improving service to our customers and safeguarding the environment. But that is just one goal achieved out of many we are pursuing. To counter years of underfunding, we will continue to aggressively search for new financing to improve all our systems, including water and drainage. My gratitude to our Finance Team and everyone at our utility who had a hand in making this happen.”
SWBNO competed with dozens of public and private entities to be among the 38 projects selected to receive a collective $6 billion in federal water infrastructure investments. It is the first utility in Louisiana to win WIFIA’s annual contest.
SWBNO and the EPA will soon negotiate the technical terms of the loan arrangement with the goal of releasing the first funding in mid-2020.
“Our team stands ready to take all the steps needed to see this funding turned into real infrastructure improvements for our customers,” Chief Financial Officer Yvette Downs said. “We’re confident the negotiations with EPA will go smoothly, and we’re looking forward to the partnership this process will forge for the future.”
The loan award is the latest success under the strategy of this utility’s new administration to seek out and secure creative financing solutions for New Orleans’ long-lingering infrastructure challenges. SWBNO also obtained a $10 million loan in September from the Clean Water State Revolving Fund. And due to the efforts of New Orleans Mayor LaToya Cantrell, Gov. John Bel Edwards, the hospitality industry and others, SWBNO received $50 million this year to honor debts related to the recent emergency work on the drainage system and fund critical projects.
SWBNO has been under a federal judgment, known as a consent decree, since 1998 to rehabilitate the sewer system. The Sewer System Evaluation and Rehabilitation (SSERP) and Emergency Sewer System Assessment (ESSA) programs were established in response to that obligation. The consent decree was modified in 2010, 2013 and 2014, extending deadlines to account for damage caused by Hurricane Katrina in 2005.
While SWBNO has effectively navigated the consent decree, the WIFIA investment will accelerate the program’s successful completion. It also grants SWBNO the financial flexibility to shift future capital outlay funds toward other critical projects that have been on hold due to tight budget constraints.
The sewer system is divided into nine basins. The work in six is complete. The remaining restorations in the Carrollton, Mid-City and South Shore basins must be completed by 2025 under the consent decree’s schedule (map attached).
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