Aging dams could soon benefit from a $7 billion federal loan program

Eight years after the program was created by Congress, the U.S. Army Corps of Engineers is taking the first step toward providing more than $7 billion in federally guaranteed loans to repair aging dams owned by states, governments local and private entities across the United States.

The Corps released a proposed rule for the low-interest loan program on Friday, kicking off a process that is expected to open aid applications in 2023, said Aaron Snyder, acting director of the water infrastructure financing program. from the body.

The Corps National Dam Inventory lists more than 92,000 structures across the United States, most of which are privately owned. The safety of the nation’s dams has come under increased public scrutiny in recent years, in part because of high-profile failures that forced the evacuation of thousands of residents in Michigan and California.

“There is a need to rehabilitate a number of our dams in the United States,” said Chuck Thompson, chief of the New Mexico Office of Dam Safety and president of the Association of State Dam Safety Officials.

But he added: ‘Rehabilitating a large facility like a dam requires significant funding, and it’s the kind of thing that even the biggest owners often struggle with.’

A recent Associated Press analysis counted more than 2,200 poor or unsatisfactory dams that are classified as high risk, meaning their failure would likely trigger a flood killing at least one person. That figure was up sharply from a similar AP analysis three years earlier.

The country’s dams have an average age of 61 years and often pose a higher risk than when they were designed and built. Homes, businesses and highways have been built under dams that once stood in remote places. A changing climate with intense thunderstorms has strained some dams beyond their original design. Maintenance has also been postponed, often because dam owners cannot afford to pay for it.

The Association of State Dam Safety Officials estimates that it could cost nearly $76 billion to rehabilitate the nearly 89,000 dams owned by individuals, businesses, community associations, states, local governments and governments. other entities in addition to the US government.

The new federal loan program “puts a pretty good dent in existing need,” Snyder said.

Most states do not have grant or loan programs specifically for repairing dams. Until recently, federal funds for dam improvements were also limited.

Since 2019, the Federal Emergency Management Agency has allocated nearly $32 million among 35 states and Puerto Rico to design and perform repairs on high-risk dams. Last year’s infrastructure act injected an additional $585 million into this program, including $75 million set aside for dam removal. It has also provided $118 million to rehabilitate aging dams built through the National Resources Conservation Service, among others.

But all of that pales in comparison to the billions of dollars in loans that will soon be available through the Corps.

“This program is critically important to improving public safety, reducing risk to vulnerable communities, and improving climate resilience to bring our aging infrastructure into the future,” said Michael L. Connor, Deputy Secretary of the army for civilian works, in a statement. announcing the proposed rule.

The Corps loan program was authorized under a 2014 law that also allowed loans for Environmental Protection Agency water systems. The EPA has issued 88 loans totaling $15 billion from 2018 to this year.

But until recently, Congress had not earmarked money specifically for dam-related loans. Therefore, the Corps had not developed rules necessary to issue loans for these repairs, Snyder said.

That changed in December 2020 when Congress began taking a series of actions by earmarking money to support the loan program. It received a big financial boost from the Infrastructure Investment and Jobs Act signed by President Joe Biden last November.

Under the proposed rule released Friday, loans would only be available for projects of at least $20 million, though repairs on multiple dams could be pooled together to meet that threshold, Snyder said. Loans can usually cover up to 49% of costs. But that could extend to up to 80% of project costs serving “economically disadvantaged communities” with low income levels, persistent poverty or high unemployment.

Beneficiaries could have up to 35 years to repay the loans.

UK to introduce bill next week to breach Brexit deal with EU

LONDON | The UK government announced on Friday that it will introduce legislation next week to override parts of the Brexit trade treaty it signed with the European Union before the UK left the bloc in 2020. The move will be a major escalation in a dispute between the UK and EU over trade rules for Northern Ireland.

British Prime Minister Boris Johnson’s spokesman, Jamie Davies, said “the bill has been approved by the relevant cabinet committees and will be presented to Parliament on Monday”.

The legislation, if approved by lawmakers, would remove parts of a trade treaty with the EU that Johnson signed less than two years ago, removing checks on goods entering Northern Ireland from the rest from the United Kingdom.

The EU has threatened to retaliate, raising the specter of a trade war between the two major trading partners.

Some legal experts say the move is illegal, but the UK government has said it will “publish a summary of the legal advice” it has received about the legislation.

Northern Ireland is the only part of the UK that shares a border with an EU country, Ireland. When Britain left the European Union and its borderless free trade area, the two sides agreed to keep the Irish land border free of customs posts and other checks, because an open border is a mainstay key to the peace process that ended decades of violence in the north. Ireland.

Instead, to protect the EU’s single market, checks are carried out on certain goods, such as meat and eggs, entering Northern Ireland from the rest of the UK.

British trade unionists in Northern Ireland say the new controls have placed a burden on businesses and frayed ties between Northern Ireland and the rest of the UK – seen by some trade unionists as a threat to their British identity.

Britain’s Conservative government says the Brexit rules are also undermining peace in Northern Ireland, where they have caused a political crisis. Northern Ireland’s main Unionist Party is blocking the formation of a new power-sharing government in Belfast, saying it will not participate until Brexit trade rules are scrapped.

Russian central bank lowers interest rates to pre-war level

Russia’s central bank cut interest rates to pre-war levels on Friday, saying inflation and economic activity were developing better than expected despite sweeping Western sanctions imposed in response to the war in Ukraine.

The bank lowered its key rate by 1.5 percentage points to 9.5%. The rate had reached 20% following the invasion of Ukraine on February 24 and the resulting sanctions by the United States, the European Union and other countries that restrict transactions with banks, Russian individuals and companies.

Economists say that over time the sanctions will corrode growth and productivity, but the central bank has managed to stabilize Russia’s currency and financial system through drastic measures such as high interest rates, restrictions on the flow of money out of the country and the obligation for importers to sell their foreign currency earnings for rubles.

These measures helped push the Russian currency’s exchange rate to 58.12 against the dollar on Friday, from 78.8 rubles to the dollar on February 23, the day before the invasion.

Inflation was 17% a year in May, but appears to have passed its post-invasion peak of 17.8% and headed for lower price increases in May and June, the central bank said. He predicted inflation would average 14% to 17% this year, fall to 5% to 7% next year and return to 4% in 2024.

Recent data indicated a halt in the decline in business activity in May.

“The external environment for the Russian economy remains challenging and significantly constrains economic activity,” the central bank said.

Although the bank was able to support indicators such as the exchange rate, economists say the long-term impact of Russia’s disrupted ties to the global economy will be severe.

In addition to the sanctions, many international companies have abandoned their investments in Russia due to the increased difficulty of doing business or because they do not want to be associated with the war.

The Institute of International Finance predicts that the Russian economy will contract by 15% in 2022, followed by a further decline of 3% in 2023, and the country faces the loss of the last 15 years of economic gains.