Administration launches municipal infrastructure loan program

The Healey-Driscoll administration today announced the launch of a new $75 million revolving loan fund to help cities and towns finance critical infrastructure, clean energy, climate resilience, and economic development projects.

The first municipal infrastructure loan program of its kind in Massachusetts, Build for Mass will provide flexible, low-interest financing to help communities move projects forward faster while maximizing available federal funding opportunities, according to the administration. Build for Mass is expected to help communities repair aging infrastructure, lower energy costs, strengthen local economies, and gain more federal dollars.

Lt. Gov. Kim Driscoll announced the initiative to local leaders at today’s meeting of the Local Government Advisory Commission at the State House.

“As a former mayor, I know how difficult it can be to move important infrastructure projects forward when financing isn’t readily available,” she said. “Build for Mass gives local leaders the flexibility they need to bridge funding gaps, keep projects on track and deliver results for their residents.”

Prioritizing Gateway Cities and rural communities, Build for Mass will offer two low-interest, revolving loan products:
• A General Loan Program will provide low-interest loans that help municipalities bridge financing gaps for federally funded infrastructure projects, including neighborhood revitalization, seawalls, and other community improvements.

• A Green Loan Program will provide bridge financing for municipal clean energy projects that qualify for the federal Direct Pay program, enabling cities and towns to receive tax credit reimbursements for eligible projects. Qualifying projects include battery energy storage and ground-source heat pump systems that lower energy costs and improve energy efficiency.

Build for Mass will operate as a revolving loan fund administered by MassDevelopment, which will oversee loan underwriting, servicing and compliance. As loans are repaid, the funds will be reinvested into future projects, creating a sustainable financing tool expected to support multiple rounds of municipal infrastructure investments over the next 20 years.
Applications are expected to open later this year.

“This program is an excellent example of the Commonwealth’s leaders working in partnership to deliver innovative programming that will offer support for communities to secure the financing needed to address critical infrastructure projects,” said MMA Executive Director Adam Chapdelaine. “We applaud the administration, the Legislature, and the teams at the Federal Funds and Infrastructure Office and MassDevelopment for launching this initiative, and look forward to the many projects this financing option will support.”

Build for Mass is funded through $50 million from the Commonwealth Federal Match and Debt Reduction Fund, established through legislation proposed by Gov. Healey to help Massachusetts compete for federal funding. The program includes an additional $25 million from the Department of Energy Resources, in partnership with the Executive Office of Environmental Affairs, to support clean energy projects and lower long-term energy costs.

“Massachusetts communities are on track to receive federal funding to build clean energy, expand transportation, and fix our aging water infrastructure, but they need financing to support their projects in the meantime,” said Energy and Environmental Affairs Secretary Rebecca Tepper. “Revolving loan funds are key to getting projects off the ground while keeping costs down.”

• See adminstration’s one-page overview of Build for Mass (PDF)