WRRDA establishes a public-private partnership (PPP) that promotes private investment in much-needed water and wastewater infrastructure. WIFIA, modeled on the successful Transportation Infrastructure Finance and Innovation Act (TIFIA) program for surface transportation, provides low-cost loans capped at 49% of a project's cost. However, TIFIA doesn't exclude the use of tax-exempt financing.
PPPs provide a useful alternative to advance project delivery for public service needs. Tax-exempt financing enables PPPs to lower the marginal cost of project development. Allowing tax-exempt private activity bonds and other financing tools to be used with WIFIA support would maximize access to diverse funding sources for critical infrastructure development and invite worthy proposals that might not apply for WIFIA under the current prohibition.
For example, the
The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.
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Source: Fitch Ratings
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