TWDB achieves highly successful bond sale for water infrastructure projects

TWDB achieves highly successful bond sale for water infrastructure projects Posted on October 8, 2024

The Texas Water Development Board (TWDB) issued $1.6 billion in triple-A-rated bonds to finance local water projects across the state during its annual State Water Implementation Fund for Texas (SWIFT) program bond sale in September. Revenue bonds for the program are issued through the State Water Implementation Revenue Fund for Texas (SWIRFT).Previous SWIRFT issuances have averaged approximately $1 billion, and this most recent bond sale is the agency's second highest to date. SWIFT bond sale proceeds are used exclusively for water projects identified in the state water plan.

This year's triple-A-rated bond sale continues a trend of strong ratings for the TWDB's bond offerings and reflects the agency's reliable financial policies and practices. Higher credit ratings and increased investor interest typically result in lower interest rates and debt service savings that can be passed on to entities that participate in the TWDB's SWIFT program. Ultimately, a successful TWDB SWIFT bond sale can allow for lower utility rates in the long term.

Issuing bonds is one funding mechanism for TWDB financial assistance programs, which are utilized by Texas communities to finance such infrastructure projects as water and wastewater supply, storage, treatment, and flood control projects.

"When investors purchase TWDB bonds, they can be confident that local entities will use those proceeds for planning, acquisition, design, or construction costs associated with important water infrastructure projects," said TWDB Chief Financial Officer Rebecca Trevino.

The SWIFT program funds various types of projects, including long-distance water pipelines, reservoirs, agricultural canal-lining, aquifer storage and recovery, and seawater desalination, which range in cost from several hundreds of thousands to billions of dollars. Inclusive of projects in the current funding cycle, it is estimated that the SWIFT program will save program participants more than $1.7 billion in lifetime debt service costs and generate an additional water supply of over 1.7 million acre-feet.

The TWDB offers several financial assistance programs in addition to SWIFT, including the Clean Water and Drinking Water State Revolving Funds, the Water Development Fund, the Flood Infrastructure Fund, the Rural Water Assistance Fund, the Economically Distressed Areas Program, and others. For more information about the TWDB's financial assistance programs, visit the TWDB's website.

This article is posted in Financial Assistance.