PRASA gets approval for up to $163M in capital improvement loans
The Puerto Rico Aqueduct and Sewer Authority announced it has received approval to receive up to $163 million for 28 capital improvement projects through a loan agreement with the Department of Natural and Environmental Resources and the Infrastructure Financing Authority’s State Revolving Fund (SRF).
The projects include improvements for sanitary infrastructure in the municipalities of Arroyo, Caguas, Carolina, Dorado, Guayama, Guayanilla, Patillas, Peñuelas and San Juan.
“After the successful restructuring of PRASA’s outstanding loan debt in July 2019 under the SRF, the agency was able to regain access to SRF Program funds with a collaboration agreement with the EPA,” PRASA Executive President Doriel Pagán-Crespo said.
The loan agreement allows PRASA to borrow funds available under the Puerto Rico Water Pollution Control Revolving Fund Program to finance the planning, design and construction of certain wastewater treatment system projects.
“In addition to providing financing for new infrastructure projects, several projects were included in the loan for which construction was interrupted and could not be completed prior to restructuring,” DNER Secretary Rafael Marchago-Maldonado said.
“These projects include the completion of the sanitary sewer system in Las Croabas in Fajardo. This project is located near the Bioluminescent Bay, which is one of the resources of high ecological value on the island,” he said.
The signing of the loan agreement will enable faster use of SRF funds, he added.
The agencies confirmed that loans made to PRASA and the notes issued by PRASA to back up the loans have been designated as “Senior Indebtedness” under the Master Agreement of Trust, between PRASA and Banco Popular de Puerto Rico. The Notes are on parity with PRASA’s Senior Bonds and Other Senior Indebtedness.
The executed loan contract provides for a 30-year amortization after completion of the relevant projects, with a 1.0% annual interest rate payable on Jan. 1 and July 1 of each year, after they are disbursed.