How to Get Your Share of the $55 Billion in Federal Water Infrastructure Funding

In November 2021, the Infrastructure Investment and Jobs Act was signed into law. The water provisions were significant: $55 billion for water infrastructure over five years, the largest federal investment in water in American history. That money is now moving through state revolving funds, EPA grant programs, and direct appropriations, and the utilities and technology companies that understand how to access it are at a meaningful advantage.

This is a practical guide. It is not exhaustive, since the funding landscape is large and shifting and specific program details change, but it covers the main mechanisms, who they are designed for, and what the access process actually looks like.

The main funding vehicles

The IIJA water funding flows through several distinct channels, each with different eligibility requirements, application processes, and use restrictions.

The Drinking Water State Revolving Fund (DWSRF). The DWSRF is not new, having existed since 1996, but the IIJA significantly increased its capitalization. The federal government grants money to each state, which in turn loans it to utilities at below-market rates for infrastructure projects. The IIJA added roughly $11.7 billion to the DWSRF over five years, with specific set-asides for lead service line replacement, emerging contaminants (including PFAS), and disadvantaged communities.

The key characteristic of the DWSRF is that it operates as a loan, not a grant, though the terms are often very favorable, and some portions are structured as grants or principal forgiveness for qualifying utilities. Each state administers its own program, which means eligibility, interest rates, and priority systems vary significantly. Every state publishes an Intended Use Plan (IUP) that describes how it plans to allocate that year’s capitalization grant. Utilities that want to access DWSRF funds need to be on their state’s project priority list, which is typically developed through an annual planning process.

The Clean Water State Revolving Fund (CWSRF). The CWSRF is the wastewater equivalent of the DWSRF, and received similar increases under the IIJA, approximately $11.7 billion over five years. It funds wastewater treatment, stormwater management, and water quality projects. The same state-by-state administrative structure applies.

The Lead Service Line Replacement program. One of the most significant new programs in the IIJA, this dedicated $15 billion specifically to replacing lead service lines. The urgency is regulatory: the EPA’s Lead and Copper Rule revisions are pushing utilities to identify and replace lead service lines within defined timelines. The funding is allocated through states and prioritizes communities with the highest lead exposure risk and the greatest financial need.

The WIFIA program. The Water Infrastructure Finance and Innovation Act (WIFIA) program provides direct federal loans for large water infrastructure projects, typically those over $20 million. WIFIA loans have long terms (up to 35 years) and low interest rates, and they can be combined with SRF funding and other sources. WIFIA is particularly suited to large capital projects where the financing cost savings over a long term are meaningful.

EPA grant programs. Beyond the SRFs, the IIJA funded several direct grant programs administered by the EPA, including the Emerging Contaminants in Small or Disadvantaged Communities Grant Program (much of which targets PFAS compliance), the Alternatives to Lead in Drinking Water Grants, and the Rural and Small Water Systems Grant Program. These are structured as grants, not loans, and tend to prioritize smaller utilities and disadvantaged communities.

What utilities need to do to access this funding

The single most important step is to get projects on the state priority list early. SRF funding is competitive at the state level, and projects that are not on the priority list, or that were added late, often wait multiple cycles before receiving funding. Most states update their priority lists annually, based on project readiness, public health need, and affordability considerations.

Project readiness matters more than most utilities anticipate. States want to fund projects that are ready to proceed, which typically means the project has completed planning and design work, environmental review is underway or complete, and the utility has demonstrated it can manage construction. A compelling need without a ready project often results in a lower priority ranking.

The required documentation varies by state and program but typically includes an application describing the project, a preliminary engineering report, evidence of environmental compliance, financial statements demonstrating the utility’s ability to repay (for loans), and documentation of disadvantaged community status (for set-asides). Working with an engineer or grant consultant who knows the state program is often worth the cost; they understand the priority system and can help position an application effectively.

What this means for water technology companies

The IIJA created a significant opportunity for technology companies, but the path is indirect. Federal and state funding programs do not fund technology procurement directly — they fund infrastructure projects, and technology may be a component of those projects.

The practical implication is that utilities with funded infrastructure projects have budget for technology that supports those projects. A utility that has secured WIFIA financing for a treatment plant expansion may be in the market for monitoring technology, digital twin platforms, AI-powered process optimization, or advanced metering infrastructure as part of that project. The funding creates procurement capacity.

For technology companies, this means knowing which utilities have secured or are pursuing federal funding, and understanding where in the project development cycle they are. A utility that just received SRF approval for a treatment upgrade is about eighteen to thirty-six months from technology procurement. A utility that is mid-construction may be making those procurement decisions now.

The EPA and state agencies publish funded project lists, often quarterly. Tracking these lists, understanding what types of projects are being funded, and building relationships with utilities before their procurement cycles begin is a viable market intelligence strategy.

There is also a direct opportunity for technology companies that help utilities access funding. Grant writing services, SRF application support, and financial planning assistance are in demand, particularly among smaller utilities that lack internal capacity. For technology companies with deep utility relationships, this can be a meaningful way to add value before and during a procurement cycle.

The window is real but not unlimited

The IIJA funding is authorized over five years, and the pace of deployment depends on how quickly states can process applications and utilities can develop shovel-ready projects. The early years have been slower than anticipated, as state programs built capacity and utilities worked through planning requirements. That means the peak deployment period is likely now through the late 2020s.

Utilities that have not yet engaged with their state SRF programs should do so now. Technology companies that have not mapped which utilities have active or pending federal funding should build that intelligence. The window is meaningful, but it will not be open indefinitely, and the utilities and companies that engage early will be better positioned than those that come to it late.

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HydroKnowledge helps water utilities and technology companies navigate the federal funding landscape and develop the strategies to access it. Get in touch if you’re working through these questions.