U.S. Department of Transportation Announces $605 Million Loan for Houston’s Grand Parkway Project
WASHINGTON – U.S. Secretary of Transportation Elaine L. Chao today announced that the U.S. Department of Transportation’s Build America Bureau will provide up to a $605 million Transportation Infrastructure Finance and Innovation Act (TIFIA) loan to the Grand Parkway Transportation Corporation (GPTC) in Houston. The loan is for the Grand Parkway Project’s H & I Segments.
“This government investment of $605 million will help regional and local agencies develop the infrastructure that best meets the needs of their communities, increase connectivity, alleviate congestion, and enhance safety,” said U.S. Secretary of Transportation Elaine L. Chao.
The Grand Parkway is a tollway construction project in the Greater Houston area, which will develop the next sections of a proposed 184-mile circumferential tollway. Segments H and I will add 43.6 miles of tollway to the Grand Parkway.
The GPTC is governed by a three-person Board of Directors and was incorporated in 2012 as an instrumentality of the Texas Transportation Commission, created to build and operate the Grand Parkway System. The GPTC is an experienced borrower, having financed the first five segments of the Grand Parkway with an $840.6 million TIFIA loan. That initial system was completed and commenced tolling operations between February 2014 and April 2016.
Construction has already begun on the project, which is being developed using a Design-Build approach, with substantial completion expected May 2022. The TIFIA loan, which will be issued at a 3.03 percent interest rate with a term of 30 years after substantial completion, represents 31.5% of eligible project costs totaling $1.9 billion. The project will increase connectivity, expand capacity, enhance safety, and accommodate population growth.
The Bureau, which administers the TIFIA credit program, was established as a “one-stop shop” to streamline credit opportunities, while also providing technical assistance and encouraging innovative best practices in project planning, financing, delivery, and monitoring. During Secretary Chao’s tenure at DOT, the Department has closed nearly $5.4 billion in TIFIA financings, supporting over $18.6 billion in infrastructure projects across the country.