New Orleans advances $66 million lead pipe bond with 49% principal forgiveness

New Orleans advances $66 million lead pipe bond with 49% principal forgivenessThe utility is leveraging Bipartisan Infrastructure Law funding channeled through state revolving funds to finance lead abatement with highly subsidized repayment terms.

The board approved a $66 million bond resolution for the Louisiana Department of Health lead reduction program.

The financing structure includes 49% immediate principal forgiveness and 0% interest on the remaining balance.

SWBNO estimates a total repayment of approximately $33 million over 30 years, averaging $1.1 million annually.

Closing is expected in late March 2026 following State Bond Commission and City Council approvals.

The Sewerage and Water Board of New Orleans (SWBNO) has authorized the issuance of $66 million in Water Revenue Bonds, Series 2026A, to fund the utility’s lead service line replacement program. During the January 21, 2026 meeting, the board voted unanimously to approve the final authorization for the bond, which leverages capital from the Bipartisan Infrastructure Law administered through the state’s drinking water revolving loan fund. Bond Counsel Jason Akers presented the financial terms to the board, describing the agreement as highly favorable for the utility. Under the structure of the loan, 49% of the principal is forgiven immediately as funds are drawn down. The remaining balance bears an interest rate of 0%. Akers noted that while the utility receives $66 million in benefit, the repayment obligation will total slightly more than $33 million, amortized over a 30-year period. The annual debt service is projected to be approximately $1.1 million. The financing supports a strategic pivot from the utility’s historical reliance on partial replacements. During post-Katrina infrastructure repairs, SWBNO completed approximately 16,000 partial line updates, changing only the public-side connections—a method now understood to potentially risk short-term lead spikes. The new funding supports a comprehensive removal strategy, though the $66 million covers only a fraction of the total abatement need, which is estimated to exceed $1 billion for a city where historical data suggests high lead line prevalence. The issuance is currently at the fourth stage of a seven-step regulatory approval process. Following this board approval, the measure must move to the City Council, the Board of Liquidation, and the State Bond Commission. Akers indicated that the utility aims to close on the funding in late March 2026. Separately, the meeting marked the first session chaired by New Orleans Mayor Helena Moreno. Under her new leadership, the board also moved to appoint Caitlin Timrech as the Interim General Superintendent, granting her authority to manage contract administration and project acceptance while the utility searches for permanent leadership.