Shearman & Sterling represented the U.S. Environmental Protection Agency (USEPA) in connection with the extension of secured Water Infrastructure Finance and Innovation Act (WIFIA) loans totaling more than $1 billion in the aggregate in San Diego and Los Angeles, California; the Hampton Roads region in Virginia, and Springfield, Massachusetts for water and wastewater infrastructure improvements.
The loan to the City of San Diego for approximately $120 million, announced on August 20, is the second WIFIA loan extended for the Pure Water San Diego program. This innovative program will use proven technology to clean recycled water into safe, high quality, drinking water, providing one-third of the city’s water supply by 2035 while diverting wastewater flows away from the Point Loma ocean discharge plant. The firm previously represented USEPA on the initial $614 million WIFIA loan supporting the program.
The loan to the Hampton Roads Sanitation District in coastal Virginia for approximately $477 million, announced on September 10, is the second WIFIA loan under a $1 billion master loan agreement extended for the Sustainable Water Infrastructure For Tomorrow (SWIFT) Program, supporting more than 20 projects to upgrade existing treatment works and build facilities that will ultimately replenish the overdrawn Potomac Aquifer with water treated to meet drinking water standards. Shearman & Sterling previously represented USEPA on the entry into the master program—USEPA’s largest loan commitment to date—and the extension of the initial $225 million loan thereunder.
The loan to the Springfield Water and Sewer Commission in Western Massachusetts for approximately $250 billion, announced September 16, is the first WIFIA loan extended in the Commonwealth of Massachusetts. The loan will support the Springfield Water and Wastewater Infrastructure Renewal Program, helping improve water quality and reliability by rehabilitating aging infrastructure throughout the system while restoring a hydropower facility that will deliver 100 percent renewable energy to the Springfield water treatment plant.
The loan to the City of Los Angeles for approximately $224 million, announced October 26, will finance a project to purify wastewater and replenish the San Fernando Basin to bolster precious groundwater resources in this drought-stressed region. The loan will support construction of an advanced water purification facility at the Donald C. Tillman Water Reclamation Plant, turning the City’s wastewater into a sustainable water source to replenish the region’s groundwater and increase its climate resiliency.
U.S. water infrastructure is aging, with drinking water and wastewater systems and facilities across the country nearing the end of their respective design lives, which frequently results in contamination and economic disruptions to communities. The WIFIA program accelerates investment in U.S. water infrastructure by providing long-term, low-cost supplemental loans for significant projects. Nationally, 60 WIFIA loans are financing over $25 billion in water infrastructure upgrades. Shearman & Sterling has represented USEPA on more than one-third of the loans closed since the program was first appropriated funding by Congress in Fiscal Year 2017.