Good News at Long Last: After a decade, Army Corps of Engineers Invites Initial Projects to Apply for Financing under the CWIFP

A decade ago, under Subtitle C of Title V of the Water Resources Reform and Development Act of 2014, often referred to as the Water Infrastructure Finance and Innovation Act of 2014 (WIFIA), a federal direct loan and loan guarantee program was authorized to assist communities across America with priority water infrastructure projects.

Mirrored on the successful Transportation Infrastructure Finance and Innovation Act (TIFIA), WIFIA 2014 authorized the Environmental Protection Agency (EPA) to accelerate investment in our nation's drinking water and wastewater infrastructure by providing long-term, low-cost supplemental credit assistance (known as WIFIA). It likewise authorized the Army Corps of Engineers (the Corps) to initiate a federal direct loan program to eligible water resources infrastructure projects (known as the Corps Water Infrastructure Financing Program or CWIFP).

Since 2018, EPA’s WIFIA program has announced over $20 billion in financing for more than $44 billion in water infrastructure projects, creating over 140,000 jobs. Meanwhile, USACE’s CWIFP program has progressed in fits and starts at a snail’s pace.

It wasn’t until 2021, seven years after its original authorization, that CWIFP finally received an initial budget allocation for the program’s credit subsidy cost; but this came hand-in-hand with a significant reduction in program scope. Instead of addressing a broad range of critical water resource project types, such as coastal flooding, aquatic ecosystems restoration, harbor deepening, flood protection, etc., (as initially set out in the 2014 legislation), the appropriations language gutted CWIFP to only one eligible project type, ‘‘.... safety projects to maintain, upgrade, and repair dams identified in the National Inventory of Dams with a primary owner type of state, local government, public utility, or private. . ." The appropriations language further specified that any project where the Federal Government holds an ownership interest is ineligible for a loan.? In short, the program’s reach was attenuated to a smaller subset of non-federal dam safety projects.

Regardless of the remarkably shocking dilution of the program’s original purpose, with its initial appropriation, there was optimism that the program would soon launch.? But alas, this was not the case.

For reasons that are not readily apparent to the casual observer, and despite extraordinary efforts from the Corps, Federal rulemaking for CWIFP took nearly two years, ten times longer than it took EPA with its twin WIFIA program. Whereas the time from the initial appropriation to publication of the first Notice of Funding Availability (NOFA) was 31 days for EPA, it took the Corps more than 20 times longer (998 days).? In general, despite the urgent need to invest in the nation’s aging dams, CWIFP has progressed much more slowly through its rulemaking and initial project selection than its peer infrastructure loan programs, while its scope of application continues to be reduced. ?

The good news is that, at long last, after a decade, on September 9, 2024, the Corps finally announced its first round of projects selected to apply for loans under the new CWIFP program. This is an important step forward, potentially providing $3.2 billion in low-cost, long-term, flexible loans for safety projects to maintain, upgrade, and repair non-federal dams; but this does not excuse the glacial pace of the program’s roll-out. Federal processes should not be arbitrary and unpredictable and there is no justifiable reason for the rulemaking and roll-out delays surrounding the CWIFP program, particularly when it is just a mirror of WIFIA and TIFIA.?

The value to the nation of the CWIFP program has been diminished due to the protracted rollout of the program and these unconscionable delays have put communities at risk. ?As such, the public deserves answers.? If, as many well-informed industry groups have asserted,[1] the cause of the delays was due to inconsistent criteria and ill-defined processes applied by the Office of Mangement and Budget (OMB), then this needs to be rectified at once. ?If the holdups were triggered by other causes, then these need to be identified and corrected. Whatever the case, it is an outrage that this credit program has been so egregiously delayed and diluted.? Taxpayers deserve so much better.

[1] Including the National Hydropower Association, the Association of State Dam Safety Officials, and the American Society of Civil Engineers (ASCE), among others.