Federal financing for infrastructure projects will now offer nearly 50% funding for certain infrastructure projects, a 16% increase over historic caps on borrowing, the U.S. Department of Transportation announced recently.
DOT Sec. Pete Buttigieg announced on Oct. 4 that the department's Build America Bureau (BAB) is offering flexible, low-cost loans "at the maximum level authorized under law" for transit and Transit-Oriented Development (TOD) projects. The Transportation Infrastructure Finance and Innovation Act (TIFIA) initiative permits borrowing up to 49% for costs of eligible projects, the DOT reports, instead of the previous cap of 33%.
"Until now, the only projects eligible for financing of up to 49% included rural projects," DOT states in the announcement, "as well as INFRA, Mega and Rural Grant “Extra” projects, which are highly rated projects that were not granted discretionary funds due to limited resources."
Build America Bureau Executive Director Morteza Farajian said his office is "ready to partner with project sponsors on effective and efficient concepts, provide technical assistance on innovative approaches, and support them through the loan approval process.”
“With its significant lending capacity," Farajian said in the announcemet, "USDOT can play an integral role in supporting projects that make our transportation system more accessible, resilient and sustainable.”
Transit projects that build new or upgrade existing public transportation systems, including infrastructure and vehicles for the systems (bus, commuter rail, ferry, light rail, subway and trolley) would be considered eligible under TIFIA guidelines, as would projects eligible for assistance under specific federal programs, the DOT reports. TOD programs with joint development plans that coordinate improvements to both transit infrastructure and non-transit properties like commercial or residential facilities "that have mutual benefits and shared costs between transit agencies and developers."
TIFIA 49 will be monitored by the Build America Bureau through data-based assessments of its effectiveness, with changed made as seen necessary. The Bureau also provides technical assistance for project sponsors and plans to expand outreach and technical assistance capabilities.
“There are countless promising transportation projects with the potential to better connect people to housing, jobs, schools, and more," Sec. Buttigieg said in the report, "but that never get off the ground because of a lack of financing.”
“The Department of Transportation has long offered flexible, low-cost financing to help bring some of those ideas to life," Buttigieg said, "and now, with TIFIA 49, we’ll be able to support more of them than ever, and lower costs for taxpayers.”
