EPA announces $109 million loan for Honolulu seawater desalination plant

WASHINGTON — The U.S. Environmental Protection Agency (EPA) announced a $109 million Water Infrastructure Finance and Innovation Act (WIFIA) loan to the Honolulu Board of Water Supply to help design and build a large-scale reverse osmosis seawater desalination plant on Oahu, Hawaii.

The plant will provide 1.7 million gallons of water each day to island residents and will decrease pressure on groundwater aquifers, EPA said.

The board will use the financing for its Kalaeloa Seawater Desalination Facility Project. According to EPA, the project includes byproduct disposal facilities, a recycled water pipeline and transmission lines. EPA said the project will strengthen water resources in central Oahu for the more arid district the board serves, west of Honolulu and Pearl Harbor.

"We are thrilled that Honolulu is using this $109 million WIFIA loan to create a reliable and renewable source of drinking water to benefit the community," EPA Assistant Administrator for Water Jess Kramer said.

"This financing will assist in constructing the first seawater desalination facility for our island community," said Ernest Lau, Manager and Chief Engineer of the Honolulu Board of Water Supply.

EPA said the board is making the loan a subordinate lien, which means it will rank second to the borrower's senior lien bonds. The board will also defer principal payments during construction to reduce the impact on ratepayers, according to the agency.

EPA said up to $11 billion in WIFIA funding is available to water systems and another $3 billion to State infrastructure financing authorities. The agency is currently accepting letters of interest.

The WIFIA program was established by the Water Infrastructure Finance and Innovation Act of 2014 and is administered by EPA.