Pennichuck corporation announced Wednesday that its Pittsfield Aqueduct Company subsidiary has arranged a $2.5 million financing pursuant to the New Hampshire State Drinking Water Revolving Loan Fund. Proceeds will be utilized by Pittsfield over the next two years to fund new water utility infrastructure projects within its recently acquired systems serving Barnstead and North Conway, New Hampshire. Such projects include distributions systems, zone booster stations, water treatment facilities, water storage facilities and well supplies.
The State of New Hampshire established the SRF, which is administered by its Department of Environmental Services, for financing water pollution control and drinking water improvement projects within the State. Inclusive of this transaction, Pennichuck has arranged seven SRF loans aggregating about $7 million among its Pennichuck Water, Pennichuck East, and Pittsfield regulated water utility subsidiaries.
SRF loans represent a low-cost source of debt financing for water utility infrastructure projects. Borrowings under SRF loans accrue interest at the rate of 1% during construction. Once the project is placed into service, the SRF loans converts to a 20-year repayment period at a fixed rate of interest equal to 80% of the rate for high quality municipal bonds.