Arizona agency begins solicitation for water projects

Arizona's Water Infrastructure Finance Authority launched a solicitation process on Wednesday for projects to bring new water sources to the parched state with financing options that could include debt issuance and public-private partnerships.

The move is part of the Arizona Legislature's 2022 creation of a Long Term Water Augmentation Fund to boost water supply with at least 75% of the money allocated to water importation projects that could include desalination. While the state aimed to appropriate $1 billion over three years for the fund, it only obtained $445.5 million as of July 1 in the wake of budget cutting.

The money can be tapped to provide "financial assistance to eligible entities, issuing debt, credit enhancements, and other forms of indebtedness," according to a solicitation document approved by the agency's board on Wednesday.

"WIFA seeks financial innovations to enhance affordability and consider public and private financing approaches, as well as combinations thereof, including the use of federal and state sponsored credit instruments (such as the Water Infrastructure Finance and Innovation Act)," the document stated, adding the authority will retain sole discretion over the amount and structure of any debt it might issue.

The solicitation has four project categories ? ocean water, surface water, wastewater reclamation, and other water sources.

"The goal of the (Long Term Water Augmentation Fund) program is to develop water supplies that satisfy utility-scale water augmentation demands," the document said, noting water importation projects should have a minimum build-out capacity of 10,000 acre-feet per year.

Initial qualifications for the process are due Jan. 16 and entities deemed to be qualified by the authority on Jan. 30 will move to the offer stage, which has an April 10 submission deadline and will involve project evaluations.

"We have designed this competitive project development process to attract extremely capable teams with outside-the-box ideas for bringing water to Arizona and give WIFA the opportunity to publicly and transparently vet those projects, ensuring that we select the right one for our state," Ted Cooke, chairman of the agency's Long Term Water Augmentation Committee, said in a statement.

The authority's request for information last year drew 28 responses, with a few citing the potential for bond issuance or a P3.

Arizona's top two water sources are groundwater and the Colorado River, which is also tapped by six other states. The latest U.S. Drought Monitor report showed abnormally dry to extreme drought conditions in most of Arizona.