Financing America’s Infrastructure Needs with Low-Cost Federal USDOT Loans

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New MTI perspective explores using billions in already-appropriated federal funds to rebuild the nation’s infrastructure
January 13, 2021

Rebuilding the nation’s infrastructure yields numerous benefits including improved safety and efficiency, job creation, increased tax revenues, and even a cleaner environment through increased efficiency and greener practices. A new Mineta Transportation Institute (MTI) perspective Financing America's Infrastructure Needs: Low-Cost Federal Loans Available Now from the Build America Bureau at USDOT discusses how to take advantage of low-cost federal loans to repair and rebuild the nation’s roads, bridges, rail, and more.

New leadership in the Department of Transportation (DOT) can make available tens of billions of dollars of federal funds for qualified projects beginning January 20th, 2021. The incoming Biden administration can take advantage of this already-appropriated funding without further Congressional action via the Build America Bureau within the DOT. 

This perspective explains the advantages of available DOT loan programs:

  • The Transportation Infrastructure Finance and Innovation Act (TIFIA) currently has approximately $70 billion of unused loan capacity.
  • TIFIA borrowers may include local governments, state departments of transportation, transit agencies, and other agencies who will build, own, operate, and finance projects in partnership with local governments.
  • The Railroad Rehabilitation and Improvement Financing Act (RRIF) currently has approximately $30 billion of unused loan capacity.
  • RRIF loans are primarily for railroad infrastructure projects. RRIF borrowers can include private owners of railroads and governments, among others.

“TIFIA and RRIF loans provide incredibly attractive financing rates and terms. The most recent loans were charged the very low annual interest rate of 1.6% per annum, fixed for thirty years,” details the perspective’s author, Martin Klepper, former Executive Director of the Build America Bureau at the Department of Transportation.

Loan programs such as these enable the financing to repair crumbling infrastructure and build new infrastructure, ultimately making the nation’s transportation systems safer, more efficient, and more accessible for everyone.
 

ABOUT THE MINETA TRANSPORTATION INSTITUTE

At the Mineta Transportation Institute (MTI) at San Jose State University (SJSU) our mission is to increase mobility for all by improving the safety, efficiency, accessibility, and convenience of our nations’ transportation system. Through research, education, workforce development and technology transfer, we help create a connected world. MTI was founded in 1991 and is funded through the US Departments of Transportation and Homeland Security, the California Department of Transportation, and public and private grants. MTI is affiliated with SJSU’s Lucas College and Graduate School of Business.

ABOUT THE AUTHOR

Martin Klepper is a nationally recognized expert in financing infrastructure and P3s. He currently serves as Chairman of Fengate Capital Management (US), a private equity investor in infrastructure in the US and Canada. He previously served as the first Executive Director of the Build America Bureau at the Department of Transportation where he was responsible for USDOT loan programs, including TIFIA and RRIF.

 

Media Contact:

Irma Garcia,

MTI Communications and Operations Manager

O: 408-924-7560

E: Irma.garcia@sjsu.edu

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