Build America Infrastructure Investment Summit

Convening U.S. and Global Infrastructure Leaders to Catalyze Growth in the U.S. Infrastructure Market

Investing in 21st century American infrastructure is an important part of the President’s plan to build on the progress our economy is making by creating jobs and expanding opportunity for all hardworking Americans. That’s why earlier this summer the President launched the Build America Investment Initiative, a government-wide effort to increase infrastructure investment and economic growth by engaging with state and local governments and private sector investors to encourage collaboration, expand the market for public-private partnerships (PPPs), and put federal credit programs to greater use.    

Today, as part of the Build America Investment Initiative, the Obama Administration will host the Infrastructure Investment Summit at the U.S. Department of the Treasury. At the Summit, over 100 leaders from industry, finance, philanthropy, and local and state governments will convene with senior Administration officials to highlight the growth in the U.S. infrastructure market, build partnerships, and develop strategies for increasing investment in sectors like transportation, water, telecommunications, and energy.  Highlights include:

Ø  The Summit brings together investors intending to deploy more than $50 billion in U.S. infrastructure. The Summit brings together global investment and advisory firms, dedicated infrastructure investors, international asset managers, utilities and construction companies, and pension funds collectively representing more than $50 billion of projected private capital investment in the U.S. infrastructure market over the next five years.

Ø  The federal government, local and state governments, philanthropists and others announce investments to expand infrastructure development. The Obama Administration and other stakeholders are announcing a series of investments and commitments at the Summit, including:

Ø  A $950 million loan for the Orlando, Florida I-4 Ultimate highway project from the U.S. Department of Transportation, the largest loan ever completed for a public-private partnership from the TIFIA program. 

Ø  $518 million in loans for electricity infrastructure from the U.S. Department of Agriculture.

Ø  The creation of a new partnership for infrastructure innovation by the Ford Foundation and Rockefeller Foundation.

Ø  The Department of Transportation and the Transportation Investment Center announce new tools and policies. This July, President Obama launched the Build America Transportation Investment Center at the U.S. Department of Transportation (DOT). The Center has already taken significant steps forward to advance best practices and promote innovative approaches and tools.

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The President has been clear that we need to do more to improve our roads, bridges, water systems, electrical grids, and other vital infrastructure systems. That means increasing public support for infrastructure and making investments for the long-term. But it also means encouraging partnership between the public and private sector; and right now there is a real opportunity to put private capital to work revitalizing U.S. infrastructure.

Today’s Summit highlights some of the important steps that leaders from the public and private sectors are taking together as part of the Build America Investment Initiative.

Investors intending to deploy more than $50 billion in investment in U.S. infrastructure

The Summit brings together global investment and advisory firms, dedicated infrastructure investors, international asset managers, utilities and construction companies, and pension funds collectively representing more than $50 billion of projected private capital investment in the U.S. infrastructure market over the next five years. The California State Teachers Retirement System, for example, is announcing a new multi-billion dollar global syndicate to invest in US infrastructure. Ullico, a labor-owned insurance and investment company, will invest $300 million in the coming five years exclusively in domestic projects. These investments complement previous public commitments this summer like CoBank’s new $10 billion rural infrastructure fund. The diversity of financial players gathered at the Summit is evidence of the growing momentum of the U.S. infrastructure sector – and the enormous potential that leaders in U.S. and global finance see in the U.S. market.

Other private sector participants include:

Ø  Global investment and advisory firms such as Blackrock, Blackstone, Carlyle Group, CIBC, Goldman Sachs, KKR, Morgan Stanley, and Oaktree Capital;

Ø  Infrastructure investors including Brookfield Asset Management, CoBank-Capital Peak Asset Management, IFM Investors, JPMorgan Asset Management Infrastructure Fund, Macquarie Infrastructure Partners, Meridiam, and Ullico Infrastructure;

Ø  International asset managers such as the Development Bank of Japan, Mitsubishi UFJ Financial Group, and Swiss Re;

Ø  Utilities and construction companies including American Water, Fluor, and Walsh Group;

Ø  Pension funds including the California State Teachers Retirement System, the Employment Retirement System of Texas, the Illinois State Board of Investment, and the Ontario Teacher’s Pension Fund.

The federal government, local and state governments and philanthropists announcing investments to expand infrastructure development

In addition to a growing pool of available private capital, the federal government, local and state governments, and philanthropists are announcing a number of investments and commitments to support U.S. infrastructure investment.

Ø  I-4 Ultimate TIFIA Loan. On September 4, DOT signed a $950 million Transportation Infrastructure Finance and Innovation Act (TIFIA) loan for the I-4 Ultimate project, a 21.1 mile roadway through Orlando, Florida. The project reconstructs and expands the capacity of 21.1 miles of Interstate 4 through downtown Orlando, replacing or improving 15 interchanges, 71 existing bridges, and adding 4 new express toll lanes. This is the largest TIFIA loan ever completed for a public-private partnership. The project benefited from engaging with DOT early in the process and using a new, streamlined PPP process that includes a standard term sheet.

Ø  $518 million in loans for electricity infrastructure. Today, the U.S. Department of Agriculture is announcing $518 million in loans for 22 electric projects around the country.

o   More than $23 million of the funds are targeted for smart grid improvements, which better manage and increase efficiencies in our nation’s electric system.

o   The loans announced today will build or improve more than 5,600 miles of electrical line in rural areas. 

Ø  The creation of a new partnership for infrastructure innovation. Today, the Ford Foundation and the Rockefeller Foundation are announcing an initial joint investment of over $1 million to support innovations in U.S. infrastructure. The new partnership will expand the infrastructure pipeline by incubating innovative public private collaborations, including:

o   Support the research, design, and launch of a predevelopment fund for job-creating, resilient and other cutting-edge projects, proving new infrastructure innovations and demonstrating the benefits of increased predevelopment funding;

o   Provide seed capital for promising regional collaboration models, including regional infrastructure exchanges, that make it easier for localities to attract private finance; and

o   Support research and design work on how to most effectively implement and scale these and other solutions.

Recognizing that well-designed infrastructure projects have multiple benefits, the initiative will advance intertwined social, environmental, and economic goals. The partnership will also work closely with the private sector to ensure alignment with the investor community. 

Ø  $20 million for transit project planning. Today, DOT’s Federal Transit Administration is announcing $20 million in competitive funds for comprehensive planning associated with new projects seeking funding under FTA’s Capital Investment Grants Program. The new Pilot Program for Transit Oriented Development Planning supports complex planning work that complements major transit projects by examining ways to improve economic development and ridership, enhance multimodal access to transit stations and enable mixed-use development in station areas.

Ø  Municipalities highlighting long-term investments in water infrastructure. Today, 30 cities and public water utilities are announcing plans to collectively invest $233 billion in operating and improving their municipal water systems over the next ten years. The 30 city consortium is also releasing a study today that highlights the benefits of water infrastructure investments for job creation and economic growth.

DOT and the Build America Transportation Investment Center making new tools available

This July, President Obama launched the Build America Transportation Investment Center at DOT. The Center is a one-stop shop for state and local governments, public and private developers, and investors seeking to utilize innovative financing strategies for transportation infrastructure projects. The Center is already helping to advance best practices and strategies to support U.S. infrastructure, building on recent Administration successes. Among other measures, the Center and DOT are:

Ø  Promoting tools and resources for innovative finance. The Build America Transportation Investment Center is providing a range of educational and technical assistance resources to support project sponsors who are considering PPPs and other forms of innovative finance. Today, the Department is releasing the first in a series of new model contract provisions to serve as a guide for highway toll concession PPP contract agreements. A subsequent guide in this series will address availability payment concession PPP contract agreements. The Department is also publishing a series of new “Project Highlights” that provide a plain language account of how project sponsors assembled the funding and financing necessary to complete public private partnerships.

Ø  Supporting PennDOT rapid bridge replacement. DOT recently approved measures to support the Pennsylvania Department of Transportation in pursuing replacement of more than 500 small bridges under a single, innovative PPP that bundles the projects to facilitate private investment. The project will benefit from both a $1.2 billion private activity bond allocation, as well as targeted flexibility with respect to NEPA implementation that will enable the developer play a significant role in ensuring compliance with environmental requirements.

Ø  Improving the permitting process.  DOT continues to take steps to improve its permitting processes. For example, the Department has recently developed and deployed eNEPA, a secure, online collaboration and project development tool to make the environmental review process faster and more efficient. In addition, DOT is working to finalize a rulemaking that will address the use of ‘categorical exclusions’ and programmatic environmental analysis to speed up permitting for certain projects.