The city of Englewood will receive a second loan from the U.S. Environmental Protection Agency to support the city’s drinking water initiative.

The $38 million is funded through the Water Infrastructure Finance and Innovation Act of 2014, a federal program that aims to accelerate investment in the water infrastructure through long-term and low-cost supplemental credit assistance for projects.

The loan will help protect Englewood’s drinking water from extreme weather and reduce lead exposure, according to the EPA. 

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“Drinking water utilities across the country, but most certainly in the west, are facing compounding issues – aging infrastructure, emerging contaminants, climate impacts, and severe drought,” Radhika Fox, EPA Office of Water Assistant Administrator, said in the news release. “I’m thrilled that Englewood will be using their second WIFIA loan to increase resiliency and provide cleaner, safer water, all while saving their residents money and creating good-paying jobs.”

Pieter Van Ry, Englewood’s utilities director, said the first loan Englewood got from WIFIA amounted to $22 million at the end of April. That money was allocated to the city’s sewer enterprise fund, which will go toward Englewood’s capital investment obligation to South Platte Renew, the regional wastewater treatment plant Englewood co-owns with Littleton.

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Van Ry added the debt the city incurs from these loans will be paid through water and sewer utility rates and fees throughout the city. He said there’s a five-year draw period on the loans and interest is only charged when funds are drawn. Once the draw period ends, the city has a five-year interest only deferment period, which is followed by a 35-year principle and interest payback period.

The city’s news release said it will save about $15.7 million by financing through the EPA, and that construction and operations of the project are expected to create about 565 jobs. 

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“The EPA’s $38 million WIFIA loan will be critical to modernizing our water treatment plant, addressing lead service lines, and making our water system safer and more resilient,” Englewood Mayor Othoniel Sierra said in a statement. “We feel very fortunate to access this level of funding with much lower borrowing costs. It allows the city to make these critical improvements while keeping rates affordable for our customers.”