EPA Announces $513 Million WIFIA Loan to the City of San Francisco for Wastewater Upgrades
SAN FRANCISCO – Today, the U.S. Environmental Protection Agency (EPA) announced a $513 million Water Infrastructure Finance and Innovation Act (WIFIA) loan to the San Francisco Public Utilities Commission (SFPUC) in California to help finance needed pretreatment and other related improvements to its Southeast Treatment Plant, which treats 80% of San Francisco’s wastewater. This action marks the second WIFIA loan supporting San Francisco’s Southeast Treatment Plant and represents the latest effort by EPA to help protect public health and the environment in the Bay Area.
“Not only will this project provide environmental and public health benefits, it will create more than 3,000 jobs in the Bay Area,” said EPA Pacific Southwest Regional Administrator John Busterud. “Rebuilding our aging water infrastructure at low cost to communities is a top priority for EPA.”
EPA is using an all-of-the-above approach to help the city of San Francisco protect public health and the environment in the City, San Francisco Bay, and the Pacific Ocean. The Southeast Treatment Plant Improvements Project will replace the two outdated headworks treatment facilities at the Southeast Plant with a new centralized preliminary treatment facility. This project from the SFPUC will help improve preliminary wastewater treatment that goes to the Southeast Treatment Plant and will help address a key wastewater management challenge facing the city. The centralized preliminary treatment system and related upgrades will improve screening and grit removal, maintain regulatory compliance, protect public health and safety, meet current seismic standards, provide advanced odor control and maximize water reuse.
The earlier WIFIA loan supporting the Southeast Treatment Plant was announced in 2018 to help finance the Biosolids Digester Facilities Project. As part of the negotiations of this second WIFIA loan to the SFPUC, the parties also re-executed the previous loan agreement at a lower interest rate that will save ratepayers an additional $432 million over the life of the loan.
“San Francisco is investing billions of dollars in our critical sewer system infrastructure to ensure we can continue to protect public health and the environment,” said Harlan L. Kelly, Jr., General Manager of the SFPUC. “The global pandemic has reinforced the importance of fiscal responsibility and the need for economic stimulus through critical infrastructure investment. Thanks to the support of our EPA partner, this low-interest rate loan will save us millions of dollars long term while providing jobs and contracting opportunities to local residents and businesses when they are needed most.”
The Southeast Treatment Plant Improvements Project will cost over $1 billion. EPA’s WIFIA loan will finance nearly half of that figure—up to $513 million. Additionally, the California State Water Board Clean Water State Revolving Fund will finance approximately $244 million with the remaining project funds coming from revenue bonds. The WIFIA loan will save the SFPUC an estimated $226 million compared to typical bond financing. Project construction and operation are expected to create 3,355 jobs. The WIFIA loan program has saved San Francisco taxpayers more than a billion dollars in savings over traditional infrastructure financing options.
Through WIFIA, EPA is playing a key role in the Administration’s efforts to improve and upgrade our nation’s water infrastructure in communities both large and small. With this transaction closing, EPA has now issued 23 WIFIA loans totaling $5.2 billion in credit assistance to help finance $11.6 billion for water infrastructure projects while creating 24,000 jobs.
Background on WIFIA
Established by the Water Infrastructure Finance and Innovation Act of 2014, the WIFIA program is a federal loan and guarantee program administered by EPA. WIFIA’s aim is to accelerate investment in the nation’s water infrastructure by providing long-term and low-cost supplemental credit assistance for regionally and nationally significant projects. EPA’s WIFIA program plays an important part in President Trump’s infrastructure plan, which calls for expanding project eligibility. The WIFIA program has an active pipeline of pending applications for projects that will result in billions of dollars in water infrastructure investment and thousands of jobs.
For more information about the WIFIA program, visit https://www.epa.gov/wifia.