The move is part of the new Water Infrastructure Finance and Innovation Act (WIFIA) program, which will offercredit assistance in the form of direct loans and loan guarantees to creditworthy water projects..

For larger infrastructure projects of about $20m, WIFIA shall offer state revolving funds and bond market. The EPA stated that WIFIA is available to state, local, and tribal governments; private entities; partnerships; and State Revolving Fund programs.

The projects that will be covered under the WIFIA include drinking water treatment and distribution projects, wastewater conveyance and treatment projects; enhanced energy efficiency projects at drinking water and wastewater facilities.

It will also feature desalination, aquifer recharge, alternative water supply and water recycling projects; drought prevention, reduction, or mitigation projects.

The EPA said funds appropriated to WIFIA program can be used at a ratio of 50 to one, which means that $17m program budget could allow EPA to provide about $1bn in loans and stimulate about $2bn in total infrastructure investment.

EPA Administrator Gina McCarthy said: “The launch of the Water Infrastructure Finance and Innovation Act program marks a huge step forward for modernizing our nation’s aging water infrastructure.

“WIFIA gives us a new opportunity to provide billions of dollars in low-interest loans to communities to build large infrastructure projects, significantly accelerating investments that benefit our nation’s public health and water security for generations to come.”

According to the agency, it will evaluate projects based on the criteria of national or regional importance, which help in maintaining or protecting public health or the environment, those which protect against extreme weather and which serve regions facing water resource challenges. The selections will be made on a competitive basis, EPA stated.

EPA projects that the US requires nearly $660bn over the next 20 years in investments for drinking water, wastewater, and stormwater infrastructure.