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Platform

Overview

The vision of WFX is to demonstrate that funding solutions and structures exist to enable communities to develop sustainable and safe drinking water and wastewater systems. The WFX platform is urgently needed as COVID-19 has exacerbated health concerns and challenged the economics of safe water in many communities already suffering from outdated water infrastructure.

The WFX Approach: Three Pillars

Organized and Systematic Engagement...

…of the community, along with necessary experts and leaders from federal, state and local government, private financial institutions, philanthropic foundations, and NGOs will generate trust and enable collaboration across the silos which prevent progress in water infrastructure funding. 

Revolving
Pre-Development Fund...

…is a critical precondition to reaching fundable deal structures, as well as being able to work alongside the community to fund a pre-development process to identify and address the most important technical and economic issues around potential water projects.

Risk Mitigation
and Catalyzing Capital...

…will be the governing principles that are applied in conjunction with appropriate risk management or loan instruments to specific deals to enhance financial structures and mitigate risks for potential investors/lenders.

Crowding in sources of funds...

…is the best way to accelerate scale-up of water projects to attract catalytic and transitional funding from multiple sources, including government entities, private finance, and philanthropy.

Our Focus: Communities First

Support all willing communities to develop fundable solutions that work for them.

Build Trust

  • Structure as 501(c)(3) to serve as a trusted intermediary.
  • Evaluate on the positive impact to the communities served, rather than by profit.

Reduce Fragmentation

  • Link communities to human and financial resources needed to develop fundable deals.
  • Work with and through existing leaders and community relationships.

Focus on Fundable Investments

  • Develop revolving loan fund to support pre-development and development costs.
  • Blend de-risking capital with other sources to close deals and create replicable templates.

The WFX Process

WFX aims to increase investment in water infrastructure and address the funding gap for small and mid-sized utilities (SMUs) by: (1) strengthening the pipeline of investable deals; (2) accelerating project development through a revolving loan fund that supports pre-development and development activities; and, (3) providing the investment capital to assume first-loss positions and bring new investors to the table.

Build a Pipeline

  • Consolidate existing public data on communities and investment needs.
  • Engage local communities through existing partner relationships.

Accelerate Project Development

  • Provide project development loans with a revolving loan fund.
  • Facilitate access to human and financial resources.

Invest in Projects

  • Invest risk capital bringing new partners to the table.
  • Identify co-investors who will invest without risk capital.

Investment Priorities

Increase SMU
Financial Sustainability

New approaches hold the potential to “bend the cost curve” by reducing long-term capital expenditure and operating costs or reducing the engineering costs associated with project design. Over time, this would include larger, urban and peri-urban communities.

Possess High
Potential to Scale

The benefits of an innovation or project model rely on its ability to scale. WFX will seek investments that provide replicable solutions to prominent challenges, and whose costs can be reduced through repeated implementation.

Not Funded in
Private Markets

WFX is designed to catalyze the private markets by bridging a gap between the early deployments of new approaches and scaled deployment. WFX will not fund projects that could currently be supported in the private markets, and will seek investments that could attract new capital sources and reach scale following investment by WFX.

Sustaining Revenue Supports Scale

  • WFX is designed to operate as a self-sustaining 501(c)(3).
  • Grant dollars from private philanthropy will support operations for an initial three-year period.
  • WFX will build-up four revenue streams to cover operating costs and support ongoing growth:
  1. Interest on development loans
  2. Success fees for projects developed by WFX and invested in by others
  3. Fees on assets directly managed by WFX
  4. Interest payments on loans provided
WFX is calling for information about communities that have an identified need and a funding gap to be screened as potential early deal candidates. To review the Letter of Interest requirements, CLICK HERE.
Copyright 2021 Water Finance Exchange Inc.
Contact Us: info@waterfx.org
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