Texas’ flagship water financing program is struggling to keep pace with unprecedented demand as communities statewide seek billions of dollars for reservoirs, pipelines, desalination plants and aging infrastructure upgrades amid worsening drought conditions and rapid population growth.
Earlier this month, the Texas Water Development Board (TWDB) approved another round of low-interest financing through the State Water Implementation Fund for Texas (SWIFT), but requests far exceeded available funding, underscoring how demand for water infrastructure is outpacing available state financing.
SWIFT had $1.28 billion available for water projects, but with 23 projects requesting a total of $4.2 billion in funding, 13 requests were denied, marking the first time applications have been turned away in the fund’s 11-year history.
The TWDB started offering SWIFT funding to help finance projects in the state water plan. It has provided more than $17 billion in low-interest loans and financial assistance since its launch in 2015. Communities use the revolving fund to finance projects ranging from reservoirs and pipelines to desalination facilities and system upgrades.
Pressure on the program is increasing as Texas faces worsening water shortages and rising infrastructure costs. The TWDB projects $174 billion in needed water investment over the next 50 years—more than double its prior estimate. That figure reflects a combination of population growth, drought and aging infrastructure. Researchers at The University of Texas at Austin released a white paper this month pointing to the state’s fast-growing data center sector as another major source of future water demand, estimating data centers could grow from less than 1% of Texas water use today to between 3% and 9% by 2040.
This year’s competition for funding placed greater emphasis on the board’s ranking criteria. The board ranks applications based on factors like population served, financial support, project readiness and water conservation. Only the 10 highest-ranked proposals received preliminary approval for financing this year.
Projects selected for preliminary approval include:
- $2.98 million for the Riverbend Water Resources District to evaluate and expand infrastructure serving the growing Texarkana area
- $419 million for the North Texas Municipal Water District (NTMWD) to build a pipeline and treatment plant in Leonard
- $611 million for the NTMWD to design a raw water pump station
- $120 million for the Hidalgo County Drainage District’s proposed Santa Cruz Reservoir
State leaders have called water infrastructure one of Texas’ biggest long-term challenges, especially as drought worsens and population grows across major metro areas. Lawmakers in recent years have approved new funding streams, but this year’s SWIFT cycle showed how fast demand is rising.
With billions of dollars in unmet requests and more communities competing for limited financing, water officials and local providers are expected to keep seeking support through future SWIFT cycles and other state programs. The funding gap also raises broader concerns about whether Texas can expand its water supply fast enough to meet future demand.
Photo by Steve A Johnson from Pexels
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