The Texas Water Development Board approved an up to $1.8 billion State Water Implementation Revenue Fund for Texas (SWIRFT) bond issue on Tuesday, along with nearly $3 billion in requests to use the fund to finance local water projects, including seawater desalination in Corpus Christie and a reservoir and pump station expansion in Brazoria County that will largely benefit a private company.
The tax-exempt and taxable SWIRFT Master Trust bonds are expected to be priced Sept. 26 by an underwriting team led by BofA Securities, pending approvals from the Texas Bond Review Board and the Legislative Budget Board.
The SWIRFT program’s triple-A ratings and interest rate subsidy incentivize local governments to move forward with projects that are recommended in the state water plan and are subject to a
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Corpus Christie’s request for $535.11 million in multi-year financing for what would be the state’s
In 2020, the state water board approved $222.47 million in multi-year financing for permitting, planning, site acquisition, design and construction for the project, which is still seeking some federal permits.
The Corpus Christi Water Authority, which is the primary water supplier to a seven-county region, expects the plant to produce about 30 million gallons of potable water daily.
Also receiving approval was $747.5 million in multi-year financing for the Brazosport Water Supply Corporation, which was created in October 2022 for the purpose of providing water supply service to certain entities in Brazoria County, particularly The Dow Chemical Company.
Board Member George Peyton said Dow is the ultimate credit behind the financing unlike the board’s normal requests from municipalities, which have ratepayers paying off the debt.
“This is a precedent-setting issue from the standpoint of having a water supply corporation that is a local sponsor coupled with a private entity,” he said. “I think this opens up the door for other private entities across the state who need access to industrial scale water to come and apply to the Texas Water Development Board for those funds.”
Nearly $336 million of the financing request is included in the taxable bond portion of the board’s upcoming sale, with the remainder allocated to issues over the next three years.
The project is aimed at mitigating extended drought conditions and increasing the reliability of the county’s raw water supply.
The board, which has issued 15 series of master trust bonds since 2015, had $8.18 billion of the debt outstanding as of June 30, according to a draft preliminary official statement. The largest sale was $1.7 billion of Series B and C bonds in 2018.