Federal Infrastructure Bank Act of 2025
The Federal Infrastructure Bank Act of 2025 creates a new nationwide financing vehicle—the Federal Infrastructure Bank (the Bank) and its guiding Holding Company—to support long-term, revenue-generating U.S. infrastructure projects. Through the Bank, eligible entities (including states, local governments, public-private partnerships, tribal governments, and infrastructure funds) can obtain equity investments, direct or indirect loans, and loan guarantees for planning, construction, operation, and maintenance of infrastructure projects with a public benefit. The Bank is designed to be a Delaware corporation, wholly owned by a Holding Company formed by a private sector-led Formation Agent. It would be regulated by the Federal Reserve and governed by a Board of Directors chosen by the Holding Company. The bill sets aside at least 10% of financing for rural projects, restricts funding to U.S. projects (and excludes Chinese or other specified restricted entities), and imposes capital and governance requirements to promote safety and soundness. It also provides a tax-advantaged path for investors via a new Holding Company tax credit (45BB) and establishes an Infrastructure Guarantee Fund to back loan payments in case of default. In short, the bill envisions a quasi-public bank-like entity to mobilize private and public capital for long-lived infrastructure, with strong oversight, risk controls, and targeted support for rural areas, while prohibiting foreign project funding and limiting certain political-risk exposures.
Key Points
- 1Structure and formation: Establishes the Federal Infrastructure Bank as a Delaware corporation, wholly owned by a Federal Infrastructure Bank Holding Company. A private Formation Agent, chosen within 60 days of enactment, assembles the Holding Company, appoints a 7-member Board, and sets governance rules. The Bank will have a national banking charter and regional offices within five years.
- 2Financing tools and eligible projects: The Bank can provide equity investments, direct loans, indirect loans, and loan guarantees for infrastructure projects in the U.S. that generate revenue and have guaranteed cash flow to service debt. At least 10% of financing must go to rural infrastructure, and the Bank may cross-subsidize non-revenue projects with revenue-generating projects. It can offer advisory services and must consider lifecycle costs.
- 3Oversight, risk, and restrictions: The Federal Reserve will regulate and supervise the Holding Company and Bank. The Bank cannot accept deposits or engage in traditional commercial or investment banking. It can pledge loans to the Fed and Treasury may purchase Bank obligations. A minimum combined risk-based capital ratio of 10% is required. There are strict foreign-asset restrictions, including limits on non-U.S. ownership (25% cap) and prohibitions on bonds to or from entities tied to the PRC or other designated risk actors.
- 4Tax treatment and incentives: The Holding Company and Bank are tax-exempt at the federal and state/local level for most income, with limited real property tax applicability. A new tax credit (Section 45BB) provides a 10% credit for taxpayers that hold a qualified Holding Company equity investment, with allowances for five years after investment.
- 5Safeguards and guarantees: An Infrastructure Guarantee Fund backs certain loans or guarantees to mitigate default risk. The bill also includes rule-of-construction language clarifying that the federal government does not guarantee the Bank’s assets.