Kentucky has secured a federal loan that is expected to save the state $100 million in its financing costs for the Ohio River Bridges Project.
Kentucky Gov. Steve Beshear announced the state has secured the loan administered through the Transportation Infrastructure Finance and Innovation Act (TIFIA) for up to $452 million.
The TIFIA loan is a long-term, low interest loan administered by the Federal Highway Administration. It allows major construction projects to get a lower interest rate than they would be able to secure through traditional financing. Before financing for the Ohio River Bridges Project was determined, the Louisville and Southern Indiana Bridges Authority had applied several times for the TIFIA loan funding. It had been passed over, until now.
Kentucky and the Federal Highway Administration are not expected to close on the TIFIA loan until mid- December, but notification that U.S. Secretary of Transportation Anthony Foxx had approved the loan came this week, according to a press release from Beshear’s office.
“Approval of this loan underscores the importance of the Ohio River Bridges Project to our national transportation system,” Beshear said in the release. “We appreciate Secretary Foxx’s approval of the loan, and we value our long-standing partnership with the Federal Highway Administration.”
Kentucky plans to finance its portion of the bridges project, which includes a new downtown I-65 bridge and the reconstruction of Spaghetti Junction, through traditional transportation funds and the sale of $750 million worth of bonds that were approved last week.
Under the financing plan, TIFIA loan proceeds will be used in 2017 to retire the bond anticipation notes, according to the release.
The total cost for Kentucky’s portion of the project is about $1.3 billion.
Indiana is financing the east end portion of the project connecting I-265 in Utica to the Gene Snyder in Prospect through a public-private partnership that relies on private companies to pay for some of the upfront costs, that will be repaid through concession payments over a 30-year term. Indiana’s cost for the project is also estimated at about $1.3 billion.
Indiana Department of Transportation spokesman Will Wingfield said the announcement of the TIFIA loan approval for Kentucky was not a surprise to Indiana officials, nor does it have any impact on Indiana’s financing plans.
