Exploring Funding Options for Water and Wastewater Treatment

Dec 14, 2022
 by Seven Seas News Team

In the U.S., grant money available through individual State Revolving Funds (SRFs) represent the largest investment in drinking water, wastewater, water reuse, conveyance, and water storage infrastructure investment in American history.

Modern contracts, like those from Seven Seas’ Water-as-a-Service®, are set to bring up-to-date treatment where previously unavailable

The traditional ways of paying for water and wastewater infrastructure are still alive and well, but more and more new funding and financing options are available for municipalities, private companies, and developers.

Grant and loan programs from state and federal agencies have seen an influx of funds, and innovative private-sector contract models are making water and wastewater infrastructure projects happen where they previously were difficult or impossible.

Wastewater infrastructure is traditionally paid for by local user fees and taxation, state-specific grants or discretionary set-asides, as well as federal grants or financing structures. But funding and financing for infrastructure differ in that financing for infrastructure, in the form of loans or bonds, requires repayment. In some cases, water-sector assets are privatized to avoid funding challenges, long-term financing costs, and operations and maintenance.

Influx of Water Sector Investment Dollars

In the United States, the Bipartisan Infrastructure Law has been making a great deal of grant money available through individual State Revolving Funds (SRFs). It’s the largest investment in drinking water, wastewater, water reuse, conveyance, and water storage infrastructure investment in American history. The law places welcome emphasis on long-underserved communities that have faced barriers to receiving the infrastructure they need.

Municipalities, private companies, and developers can explore funding and financing options from a variety of state and federal agencies, such as the Environmental Protection Agency and the Department of Agriculture, which both offer loan and grant programs. There also are some opportunities for grants from nonprofits.

Water-Sector Investment Gap Remains

Realistically, however, the Infrastructure Law’s $50 billion investment over five years is a drop in the bucket compared to actual need, and many entities find it difficult to secure the money they need for projects.

In 2018, the EPA’s 6th Drinking Water Infrastructure Needs Survey and Assessment estimated that $472.6 billion would be needed to maintain and upgrade U.S. drinking water infrastructure over the next two decades. And as far as wastewater treatment, in 2016, the EPA estimated the nation’s wastewater infrastructure need would require $271 billion in investment.

Privatized utilities have often fallen short on promises and run afoul of public opinion. So, there still are many funding and financing gaps to fall through.

To fill the gaps, public-private-partnership (P3), as well as build-own-operate and build-own-operate-transfer arrangements, are gaining ground. These contracts bring in much-needed technical expertise, maintenance resources, and risk management capabilities from the private sector. Such performance-based contracts bundle long-term operations and maintenance with infrastructure delivery, and typically the water company assumes most or all risk.

Water-as-a-Service® (WaaS®)  from Seven Seas Water Group provides water and wastewater services at a guaranteed price at a guaranteed quality or the company does not get paid. In this way, WaaS® aligns company and client interests, incentivizing the highest quality builds and forging h3 relationships to last decades. Our clients can leave water treatment and industry regulations to the experts.

Lease-plant, phased installations, and other flexible structures are also available through Seven Seas. No matter the funding or financing route chosen, contact Seven Seas. We’re here to help you navigate your financing options.