US to establish infrastructure bank

President Barack Obama's proposed budget for fiscal 2010 includes the creation of a National Infrastructure Bank. Costing US$ 25 billion over five years, the body would provide direct funding and co-ordination for projects.

The budget statement said, "The Budget proposes to expand and enhance existingFederal infrastructure investments through a National Infrastructure Bank designed to deliver financial resources to priority infrastructure projects of significant national or regional economic benefit."

Originally proposed in 2007 in a bipartisan bill from senators Christopher Dodd and Chuck Hagel, the bank was intended to improve infrastructure transit systems, water infrastructure and roads and bridges in the US. The bill said the bank would deal with projects with a minimum value of US$ 75 million, and would require up to US$ 60 billion in financing, to be raised through bonds.

The bank is not intended to replace existing schemes for infrastructure funding, but will focus on schemes that will increase capacity but which do not currently receive adequate funding.

Under the proposed budget, the bank would be set up with initial funding of US$ 5 billion in the fiscal year starting on October 1. It would then receive US$ 25 billion up to 2019.