On July 7, the Build America Bureau and U.S. Transportation Secretary Sean Duffy announced that government loans under the Transportation Infrastructure Finance and Innovation Act (TIFIA) would be significantly expanded for all project types. The policy change will allow all projects to receive TIFIA loans up to 49% of project costs, an increase from the prior cap for all projects of 33%.
The policy change will significantly increase the amount of very low-cost, government-supported federal loans that P3s and other strategically important transportation infrastructure projects will be eligible to receive going forward. The policy change is clearly an effort to render more large transportation projects bankable after years of very high-cost inflation in the highway construction sector and for other transportation projects as well.
The change will also make the Bureau a much more active and involved stakeholder in the projects that it finances. At 49% of project costs for a typical transportation P3, the agency would have higher financial exposure than either the project’s equity investors or even bondholders.
“Unleashing the full value of the TIFIA program represents another step forward in getting America building again,” said Secretary Duffy. “It’s common sense to allow all eligible projects the same access to our low-interest financing opportunities. We are building infrastructure easier, quicker, and cheaper. This update is the result of extensive analysis, successful pilot programs, and listening to feedback from our partners.”
