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State Infrastructure Banks
A State Infrastructure Bank (SIB) is a revolving fund that allows funds from federal surface transportation funding programs to be loaned to eligible federal-aid projects. The state then receives repayments over time that can be directed towards other transportation projects. A SIB, much like a private bank, can offer a range of loans and credit assistance enhancement products to public and private sponsors but may first need to be authorized by the State Legislature. SIBs require a 25 percent non-Federal match in cash to all Federal funding put in the account – although if a State has a sliding scale ratio, it may be applied. States also have the opportunity to contribute additional state or local funds beyond the required nonfederal match.
Thirty-two states currently have SIBs which are generally used to finance surface transportation projects such as highway and road construction. However, these funds are also eligible to be used to finance diesel retrofits or other emissions reduction programs if a state DOT chooses to commit funds to such a program. Oregon is one of the first states to look at this possibility, announcing in June 2006 that it would commit $3 million from its SIB and $2 million from the state Department of Energy to capitalize an initiative to help finance of the purchase of EPA Smartway Upgrade Kits for trucks traveling along the I-5 corridor. Monthly fuel savings from the kit can exceed monthly loan payments, thereby increasing profits from the first day companies acquire the kits. More information on this program and Cascade Sierra Solutions, a non-profit which is distributing the kits is available at: www.cascadesierrasolutions. org. For more information on SIBs, please refer to the FHWA website at: www. fhwa.dot.gov/innovativefinance/sib.htm.
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