This agreement provides a capitalization grant for the recipient's drinking water state revolving fund (DWSRF) program

The Environmental Protection Agency (EPA) Region 5 awarded the Illinois Environmental Protection Agency (IEPA) a $39.79 million Drinking Water State Revolving Fund (DWSRF) capitalization grant (CFDA 66.468) effective July 1, 2025, through June 30, 2029. Under this award, IEPA will provide low-interest rate financing to eligible public water systems throughout Illinois for planning, design, and construction of drinking water infrastructure improvement projects. The grant supports SDWA (Safe Drinking Water Act) compliance and public health protection objectives by capitalizing a revolving loan fund mechanism that delivers below-market-rate loans on a sustainable, long-term basis.

In addition to direct project financing, IEPA may allocate funds to targeted set-aside activities including technical assistance to small water systems, operator certification programs, and source water protection initiatives. The anticipated outcomes include increased technical, managerial, and financial capacity among participating public water systems and measurable public health protection benefits for Illinois citizens. As a formula grant to a state environmental agency, this award reflects the standard federal approach to drinking water infrastructure financing and builds upon IEPA's established role administering over $900 million in cumulative state revolving loan fund capitalization grants.

The award furthers the public health protection objectives of the safe drinking water act (SDWA). Activities:the recipient of these funds will provide low interest rate financing to eligible public water systems for the costs associated with the planning, design, and construction of eligible drinking water improvement projects. The recipient may also use some of the funding for specific set-asides, including but not limited to providing technical assistance to small systems, for operator certification activities, and source water protection activities. Subrecipient:drinking water state revolving fund program is exempt from 2 CFE 200.332 subrecipient monitoring requirements as provided in 2 CFR 1500. Program provides assistance in the form of loans.outcomes:the anticipated deliverables include financing, planning, design, and construction of eligible public health-related projects. Deliverables will also be used to increase the technical, managerial, and financial capacity of public water systems. The expected outcome is public health protection. The intended beneficiaries include citizens throughout the state.