The U.S. Environmental Protection Agency (EPA) is announcing that the Government of Puerto Rico has repaid its $194.5M debt to the Puerto Rico Clean Water and Drinking Water State Revolving Funds (SRFs). This milestone is the result of three years of dedicated effort between EPA and the Government of Puerto Rico to ensure that Puerto Rican communities can once again access low-interest loans to replace or upgrade aging or inadequate water infrastructure.
“Today’s announcement is a welcome and important step toward returning the Puerto Rico State Revolving Funds to financial viability,” said EPA Assistant Administrator for Water David Ross. “The $194.5M repayment to the Puerto Rico Clean Water and Drinking Water SRFs means that these funds will be available to protect public health and pay for critically-needed drinking water and wastewater infrastructure projects.”
“Hurricanes Irma and Maria devastated portions of Puerto Rico’s infrastructure and made even more clear the critical need for lasting and sustainable improvements in Puerto Rico,” said EPA Regional Administrator Pete Lopez. “Restoration of this funding is a critical step in EPA’s comprehensive and continuing efforts to help Puerto Rico recover from the hurricanes, with a focus on helping communities and building capacity within Puerto Rico’s government.”
“The recapitalization of the Puerto Rico Clean Water and Drinking Water State Revolving Funds (SRFs) proves once more the commitment of Puerto Rico and the administration of Governor Ricardo Rosselló with the implementation of federal programs and the financing of projects that benefit the most vulnerable communities in the Island,” said Puerto Rico Fiscal Agency and Financial Advisory Authority Chief Executive Officer Christian Sobrino. “The Puerto Rico SRFs will be fully deposited in two recently created trusts to safeguard their future operations and provide accessible sources of financing to develop infrastructure projects to improve access to drinking water and maintenance of sanitary sewers in the communities of Puerto Rico.”
More information on SRFs:
Drinking Water: https://www.epa.gov/drinkingwatersrf
Clean Water: https://www.epa.gov/cwsrf
During the Puerto Rico financial crisis of 2016, the Puerto Rico Government Development Bank (GDB), which served as the fiscal agent of the Clean Water and Drinking Water SRFs, declared bankruptcy. At the time, GDB held a balance of approximately $194M in SRF money. To address the situation, the Government of Puerto Rico recognized GDB’s debt due to the SRFs and included the debt repayment in its fiscal plans. It also appointed the Puerto Rico Fiscal Agency and Financial Advisory Authority as the new fiscal agent for the Puerto Rico State Revolving Funds.
Under the Clean Water and Drinking Water State Revolving Fund programs, EPA provides grants to all 50 states and Puerto Rico to capitalize SRF loan programs. The states and Puerto Rico contribute an additional 20 percent to match the federal grants. The 51 SRF programs function like infrastructure banks by providing low- interest loans to eligible recipients for drinking water and clean water infrastructure projects. As the loan principal and interest are repaid over time, it allows the state's DWSRF or CWSRF to be recycled or “revolve.” As money is returned to the state’s revolving loan fund, the state makes new loans to other eligible recipients.
SOURCE: The U.S. Environmental Protection Agency