“As New Jersey recovers from the pandemic, we must seize the opportunity to create family-sustaining green jobs that put our residents back to work building the critical water infrastructure that our state needs to protect our environment and public health,” Acting DEP Commissioner Shawn LaTourette said. “Through the DEP’s incredible partnership with the I-Bank, we combine forces to create the New Jersey Water Bank, which offers innovative and affordable financing for water purveyors and local governments to make investments that promote the public good.”
The bonds, issued as Green Bonds last week with maturities through 2050 and an average effective interest rate of 1.875%, leverage DEP zero-interest loans to provide a total of $386 million in projects financed through the Water Bank, creating an estimated 4,630 direct construction jobs across the State. The Water Bank finances projects that improve and protect water quality and address public health issues through the replacement and upgrade of existing infrastructure.
The projects funded include green infrastructure, sewer system collection and treatment improvements, drinking water treatment and distribution system enhancements, and projects to reduce or eliminate the combined sewer overflows that too often plague environmental justice communities. These projects create good-paying green jobs that will help New Jersey recover from the economic impacts of the Covid-19 pandemic—a key priority of the Murphy Administration. Projects funded in this recent round of Water Bank financing include:
Passaic Valley Sewerage Commission, $6.5 million, improvements to increase wet weather treatment capacity thereby reducing the frequency and duration of combined sewer overflows in member communities;
Plumsted Township, $22.8 million, construction of an advanced wastewater treatment facility to eliminate failing septic systems;
Little Egg Harbor Municipal Utilities Authority, $6.1 million, projects to replace aging potable water mains and to construct a new potable water treatment plant to increase the system capacity and resilience;
Camden County Municipal Utilities Authority, $72 million, sludge digester improvements at the wastewater treatment facility to reduce the amount of sludge generated and to generate enough biogas to meet 50 percent of treatment facility power needs.
“The recent Green Bond sale represents another successful conclusion to the hard work of the DEP and I-Bank staff in facilitating the construction of so many critical water projects in our State,” said I-Bank Chairperson Robert Briant, Jr. “The program’s ability to fund an additional $50 million of projects due to the new interest subsidy methodology is a terrific outcome that stretches tax-payer dollars to create 600 more jobs for New Jersey’s construction industry.”
The I-Bank working in concert with the DEP, took advantage of the market’s current low interest rates to create a new funding methodology to maximize the State’s limited Drinking Water funds. Specifically, in lieu of the DEP providing only traditional interest free loans from funds of the Drinking Water SRF, DEP funds were used to subsidize interest on additional I-Bank Bonds issued thus reducing the amount of funds needed by DEP thereby freeing those funds to finance future projects.
This new methodology allowed the DEP to finance $33 million of Drinking Water projects utilizing just $9 million of funds. The $24 million savings will be leveraged with I-Bank funds to provide an additional $45 million to $50 million of funding for new drinking water projects in the coming year. These savings will be critical to assisting new applicants in addressing their water projects with the program’s low rates.
The I-Bank and DEP were able to accomplish this by using some of the $50 million of funds appropriated to the Drinking Water SRF Program by the Legislature and signed into law this fiscal year by Governor Murphy.
For more details about the New Jersey Water Bank, including funding priorities and application information, visit: https://www.nj.gov/dep/dwq/mface_njeifp.htm