EPA Financing Green Infrastructure: A Best Practices Guide for the Clean Water State Revolving Fund

This best practices guide from the U.S. Environmental Protection Agency (EPA) presents methods through which Clean Water State Revolving Fund (CWSRF) programs can be better utilized by states to fund and support green infrastructure projects at the agency or local level. The guide organizes best practice methods into four categories:

  • Outreach
  • Prioritization
  • Financial Incentives
  • Financing Mechanisms

The outreach section recognizes that many communities are unaware of CWSRF funding opportunities, and that states can do a better job marketing the funding source (the report provides a table of marketing examples from various states on page 3). States can also provide technical assistance, helping communities identify appropriate green infrastructure responses and creating an operation and maintenance plan to carry out projects. States can also help form partnerships with organizations such as engineering firms, state agencies, and conservation organizations that can help facilitate green infrastructure funding opportunities.

The prioritization section argues that state priority systems, which rank and evaluate projects, will help ensure borrowers are aware of funding opportunities and the types of projects that will meet state objectives. The guide provides a table showing how different states have implemented priority point systems for green infrastructure projects on page 5. The guide also suggests that states consider setting aside CWSRF money specifically for green infrastructure projects.

The financial incentives section notes how states can use CWSRF programs to incentivize green infrastructure by setting conditions for loan assistance - such as reducing interest rates, modifying the repayment schedule, or providing additional subsidies for green infrastructure projects. For example, New York uses an additional subsidy providing funding to their Green Innovation Grant Project, which covers 90% of project costs.

The financing mechanisms section describes how states can develop innovative financial programs and assistance delivery mechanisms to help borrowers benefit from the CWSRF’s flexibility. The guide suggests exploring co-funding between CWSRF programs and other funding sources to better support large projects, sponsorship lending between traditional and nontraditional projects as was used in Delaware to fund conservation easements and fee-simple land purchases, conduit lending through state agencies, local governments, or commercial banks to better allow CWSRF to fund a number of smaller projects, and loan guarantees that provide additional security and reduced interest rates.

Throughout the guide, examples are provided showing how state agencies are using the best practices showcased in the document.




Publication Date: 2015

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