The U.S. Environmental Protection Agency (EPA) has awarded a $109 million Water Infrastructure Finance and Innovation Act (WIFIA) loan to the Honolulu Board of Water Supply to support construction of a seawater desalination plant on Oahu, Hawaii.

The Kalaeloa Seawater Desalination Facility Project will produce 1.7 million gallons per day of drinking water, providing an alternative supply for central Oahu and reducing reliance on groundwater aquifers, according to EPA’s Oct. 16 announcement.

The project includes construction of the reverse osmosis desalination facility, byproduct disposal infrastructure, a recycled water pipeline and transmission lines. The new supply is intended to strengthen water reliability in the more arid service area west of Honolulu and Pearl Harbor.

The loan will be structured as a subordinate lien, placing it behind the utility’s senior lien bonds for repayment. The Board of Water Supply also plans to defer principal payments during construction to help limit the project’s near-term impact on ratepayers.

The project will be the island’s first seawater desalination facility, according to Ernest Lau, manager and chief engineer of the Honolulu Board of Water Supply.

EPA’s WIFIA program provides long-term, low-cost financing for water infrastructure projects. The agency said $11 billion is available for water systems, with another $3 billion available to state infrastructure financing authorities.