State receives $196M loan from EPA for water projects

Indiana has been awarded a $196 million loan from the U.S. Environmental Protection Agency that will support drinking water and wastewater projects around the state, officials announced Friday.

Bruno Pigott, acting assistant administrator in the EPA’s Office of Water, said the funding through the State Infrastructure Financing Authority Water Infrastructure Finance and Innovation Act, or SWIFIA, loan program will go toward updating aging water systems, replacing lead pipes, building and expanding water systems in growing areas and improving cybersecurity systems to prevent hackers from impacting water operations.

“With this financing, Indiana will accelerate much-needed investment in drinking water and wastewater projects across the state,” Pigott said at a press conference held at the Indiana Statehouse. “We know that our infrastructure will only continue to age. In some places, it’s up to 120 years old.”

Officials expect the funding will create up to 1,100 jobs in Indiana.

To receive funding, municipalities will submit proposals and ask for specific dollar amounts in applications sent to the Indiana Finance Authority, which manages Indiana’s wastewater and drinking water revolving fund loan programs and often completes regional water supply studies.

The IFA will then evaluate requests and direct funding for projects. The low-interest loans will be paid back over about 20 to 30 years once projects are completed.

The IFA is currently analyzing water demand supply across a 28-county area that touches the headwaters of the Wabash River. The state agency took over the study previously helmed by the Indiana Economic Development Corp. last year in anticipation of a massive high-tech park in Boone County known as the LEAP Lebanon Innovation District.

“Businesses can’t come to Indiana if they do not have safe and clean water, and that’s what our investment in infrastructure does,” Pigott said. “It provides those resources to bring businesses to Indiana.”

Across Indiana, there are more than 4,000 drinking water systems and more than 1,000 wastewater treatment plants, some of which are old and others are new.

“So, there’s a variety of states, but one of the things we realize, just like the roads and bridges we have across this country, if our wastewater and drinking water infrastructure isn’t sufficiently strong, then you can’t operate efficiently,” Pigott said.

Pigott worked for the Indiana Department of Environmental Management for more than 20 years and served as its commissioner for five years before he joined the EPA.

In 2014, the EPA created a direct loan program through the Water Infrastructure and Innovation Act, or WIFIA. In 2019, Indiana was the first state to access funding from WIFIA when it closed on a $436 million loan that financed more than 25 projects and produced a savings to Indiana utilities of $130 million, said Jim McGoff, chief operating officer and director of environmental programs with the Indiana Finance Authority.

The Bipartisan Infrastructure Law signed by President Biden in 2021 also dedicated $50 billion to improving the country’s water, wastewater and stormwater infrastructure.

“If now isn’t the time to make these changes, I don’t know when it is because more money is coming to communities to make these improvements,” Pigott said. “In Indiana, these investments will help expand services and communities that have experienced growing needs.”