The EPA estimates that funds appropriated to the WIFIA program can now be leveraged at a ratio greater than 50 to one, meaning that the $17m program budget could allow the organization to make approximately $1bn in loans and stimulate about $2bn in total infrastructure investment.
As we have all known for a while, a properly functioning WIFIA program would provide long-term, low-cost credit assistance in the form of direct loans and loan guarantees to creditworthy water projects across the US. On face value, this is good news for the P3 industry, which has been keen to put this funding plan in place for some time.
Skeptics will question quite why it has taken over two years to provide the necessary financing to get the program off the ground, but at least this now seems to have arrived. Water has long been touted as a key growth area for US P3s, and this new announcement could finally be the start of that growth.
If WIFIA can be harnessed anywhere as successfully as TIFIA then that is something of an inevitability – as long it creates real projects for the market to get their teeth into. It is early days, but with vast sums such as this placed into the program that should be more than possible. US infrastructure is badly lagging behind other developed countries, so there is definitely no shortage of opportunity in that regard.
Nor is there a shortage of appetite from the private sector to impart its collective wisdom to putting these opportunities into practice. Although things are never that simple in the crazy world of US politics, so baby steps will inevitably follow, but at least now the door has finally been opened.
Speaking of opening doors, Puerto Rico has this week re-ignited its own P3 opportunities after the market ground to a halt amid serious financial woes.
Despite once appearing to be something of a progressive haven of P3 opportunity a few years back, Puerto Rico has struggled to regain that footing after seeing its credit rating reduced to junk status in 2014.
The Chamber of Representatives has now approved the Senate Bill number two for P3s, which is expected to give additional mechanisms to companies to be able to propose unsolicited projects to the government.
Whether this is actually going to kickstart Puerto Rico’s ailing market is questionable, especially with the country still reeling financially, but at least it shows the government is pushing to address the issue.
After all, if governments in the Americas continue to show willingness to develop P3s further, then the New Year may just bring some new horizons for all concerned – whatever hurdles they may be facing.