Step 1

The EPA and the State of Rhode Island commit capital to the fund.

Step 2

Construction money is raised by one or both of the following methods:

1. Federal and State capital is used as collateral to raise funds in the bond market by a process called leveraging. This method is used when there is a great need for construction dollars.
2. Federal and State capital is loaned directly to the borrowers without accessing the bond market. This method is used when project demand is low and/or when credit conditions warrant.

Step 3

Borrowers pay back their loan to the Fund, usually over 20 years. The loans carry an interest rate of 1/3 off the borrower’s market rate for the CWSRF and 1/4 off the borrower’s market rate for the DWSRF. These subsidized interest rates allow communities to save millions of dollars in interest costs over the life of the loan.

Step 4

The repayment stream from earlier borrowers becomes the source of funds for later borrowers. In this way, the State Revolving Fund is perpetual and will always be available to local governmental units in Rhode Island.

The Rhode Island Clean Water Finance Agency is an Equal Opportunity Employer and monitors the adoption and implementation of affirmative action policies by its loan recipients. Such policies include compliance with all Federal and State employment regulations and maximum utilization of Minority and Women Owned Business Enterprises (MBE/WBE).