City refinances loan for Pure Water project, potentially saving $ 293 million over 15 years
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SAN DIEGO (CNS) – The city of San Diego announced Thursday it has refinanced a loan with the U.S. Environmental Protection Agency that city leaders say will save taxpayers $ 293 million then that the utilities department begin work on Pure Water San Diego – the largest infrastructure project in the city’s history.
Pure Water is a phased, multi-year program intended to provide one-third of San Diego’s water supply locally by the end of 2035. According to a city statement, it will use water purification technology to clean recycled water to produce safe, high-quality water. quality drinking water.
“The innovative Pure Water Project is an investment in our future that will provide San Diego with the reliable water supply we need for our economy to grow and our city to prosper,” said Mayor Kevin Faulconer. “By taking advantage of historically low interest rates, we were able to reduce borrowing costs by nearly $ 300 million and deliver these savings to our water customers.
EPA’s Water Infrastructure Finance and Innovation Act loan funds up to $ 614 million in project costs in Phase I of the program. After refinancing, it now has a single fixed interest rate of 1.29% and a repayment term of 35 years from the “substantial completion” of the project, which is projected during fiscal year 2025. .
The loan was initially executed in November 2018 with an interest rate of 3.36%. The reduced interest rate translates into savings of approximately $ 293 million over the life of the loan.
The WIFIA loan will provide approximately 74% of the water supply system’s share of the total costs of the Phase 1 project of the Pure Water program. Approximately 97% of the project costs are expected to be funded by the WIFIA loan, State Revolving Fund loans, and grant proceeds.
“Working on the Pure Water program is exciting because of the sustainable water supply it will provide to San Diego in the future,” said Shauna Lorance, director of the city’s utilities department. “The refinancing of this loan makes it better value for taxpayers. “
Bids for the construction of the North City Pure Water Facility component of the Pure Water System are due this fall. According to a city statement, city leaders plan to award bids in the spring of 2021.
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