Federal Formula Grant Award Summary

The Environmental Protection Agency (EPA) Region 4 awarded $409.4 million to the North Carolina Department of Environmental Quality on July 1, 2025, under the Drinking Water State Revolving Fund (DWSRF) program (CFDA 66.468). This capitalization grant funds the establishment and expansion of North Carolina's DWSRF, which provides low-cost, long-term financing to public water systems for planning, design, and construction of drinking water infrastructure improvements. Eligible uses include treatment facility upgrades, water distribution system enhancements, source water supply improvements, finished water storage tank replacement or construction, and other public health protection projects. The award includes dedicated funding for hurricane disaster recovery, specifically supporting systems damaged by Hurricanes Helene and Milton in 2024.

The DWSRF capitalizes a revolving loan mechanism through which North Carolina will deliver principal forgiveness loans, negative interest loans, and grants to public water systems. Additionally, the state may allocate funds for set-aside activities including technical assistance to small water systems, operator certification programs, source water protection initiatives, program administration, and state program management. All funded projects and activities must reduce flood or fire damage risk, enhance resilience to hydrologic change, or improve preparedness for natural disasters. The award period extends through June 30, 2032, enabling sustained infrastructure financing and capacity building across North Carolina's public water systems.