WaterSMART Large-Scale Water Recycling Grants: $130 Million for Western Water Infrastructure

The Bureau of Reclamation's WaterSMART Large-Scale Water Recycling Projects program is offering up to $130 million in federal funding for the planning, design, and construction of major water recycling infrastructure across the Western United States. This is one of the largest single funding opportunities available for water reuse projects, with individual awards potentially reaching $130 million.

Authorized under Section 40905 of the Infrastructure Investment and Jobs Act (IIJA), this program helps communities develop local, drought-resistant water supplies by turning currently unusable water sources into reliable recycled water.

Program Overview

The WaterSMART Large-Scale Water Recycling Projects program provides federal cost sharing of up to 25% for water recycling projects with a total project cost of $500 million or more. The program prioritizes projects that create reliable water supply in a cost-effective manner, reduce existing water diversions, address environmental and water quality concerns, and promote collaborative partnerships.

This is a Cooperative Agreement, meaning the Bureau of Reclamation will have substantial involvement in the project, including collaboration on management, review, input, and approval during implementation.

Key Funding Details

• Total Program Funding: $130,000,000
• Award Ceiling: $130,000,000
• Award Floor: $1,000
• Expected Number of Awards: 1 to 10
• Federal Cost Share: Up to 25% of total project cost
• Minimum Total Project Cost: $500,000,000
• Minimum Applicant Cost Share: 75% of total project cost
• Application Deadline: May 13, 2026, 4:00 PM MDT
• Anticipated Project Start: May 13, 2027
• Anticipated Project End: May 13, 2030
• Funding Opportunity Number: R25AS00322

Cost Sharing Requirements

Applicants must provide at least 75% of the total project cost from non-Federal sources. All cost-share contributions must be non-Federal in original source and meet the requirements of 2 CFR 200.306. For example:

• Total project cost of $500 million = minimum $375 million from the applicant, up to $125 million from Reclamation
• Total project cost of $1 billion = minimum $750 million from the applicant, up to $250 million from Reclamation

The Federal funding amount is based on the maximum 25% of the total cost of planning, design, and construction activities completed after Reclamation's feasibility study review findings and within three years of the application deadline.

Eligibility Requirements

Who Can Apply

• States, Tribes, municipalities, irrigation districts, water districts, and wastewater districts
• Any state, regional, or other organization with water or power delivery authority
• State, regional, or local authorities whose members include organizations with water or power delivery authority
• Agencies established under State law for the joint exercise of powers, or combinations of the entities above

Geographic Requirement

All applicants must be located in the Western United States: Arizona, California, Colorado, Idaho, Kansas, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, and Wyoming.

Who Cannot Apply

• Federal government entities
• Foreign entities
• Individuals
• Institutes of higher education

Eligible Projects

Eligible projects must reclaim and reuse municipal, industrial, domestic, or agricultural wastewater or impaired groundwater or surface water, with a total project cost of $500 million or more. Funding can support three types of activities:

Planning

Eligible planning activities support the development of a feasibility-level design and cost estimate, including:

• Preparation of appraisal and feasibility-level cost estimates
• Site-specific investigations to gather design data
• Pre-final design activities contributing toward a feasibility-level design
• Collecting data and preparing documentation for environmental compliance reviews

Final Design and Value Engineering

Eligible final design activities begin after the feasibility-level planning stage, including design activities required to reach 100% final design and Value Engineering Accountability Reports.

Construction

Applicants may request funding for all phases of construction for Large-Scale Water Recycling Projects.

Ineligible Projects

• Water recycling projects with a total project cost less than $500 million
• Development of water recycling feasibility studies
• Water reclamation projects that are solely ocean or brackish water desalination
• Operations, maintenance, and replacement (OM&R) activities

Feasibility Study Requirement

Before funding can be awarded, Reclamation must review your Feasibility Study and determine that it meets Reclamation's Directives and Standards. All applicants are requested to submit their Feasibility Study to Reclamation by April 13, 2026 — one month before the application deadline. This is a critical step that should not be overlooked.

Merit Review Criteria (100 Points)

Applications are scored on 100 total points across seven criteria:

A. Water Supply (30 points)

The highest-weighted criterion evaluates how the project stretches water supplies and contributes to water supply sustainability. Reviewers will consider:

• How many acre-feet of water will be made available annually
• What percentage of service area demand the recycled water will meet
• Whether the project reduces the need for new non-recycled water supplies
• Whether the project alleviates pressure on existing water supplies
• How drought-resistant the water made available by the project will be

B. Environment and Water Quality (10 points)

Points awarded based on environmental benefits including:

• Improvements to surface water, groundwater, or effluent discharge quality
• Restoration or enhancement of habitat for non-listed and threatened/endangered species
• Improved flow conditions in natural stream channels
• Reduced environmental impacts from water diversions

C. Economic Benefits (20 points)

Evaluates cost-effectiveness and economic analysis:

• Cost Effectiveness: Cost per acre-foot of recycled water compared to non-reclaimed alternatives
• Economic Analysis: Quantified and monetized project benefits vs. costs, including water supply reliability, ecosystem benefits, water quality, energy efficiency, and avoided costs

D. Reclamation's Obligations and Watershed Perspective (5 points)

Points for projects that help meet Reclamation's legal and contractual obligations (water right settlements, river restoration, minimum flows) and promote a watershed-level approach through regional partnerships.

E. Presidential and Department of Interior Priorities (20 points)

Up to 20 points for projects that demonstrably:

• Advance the Trump Administration's priorities including E.O. 14154: Unleashing American Energy
• Include AI technologies that advance Department of Interior priorities
• Align with Secretary Burgum's strategic objectives
• Support water management in Reclamation States, with priority for the Colorado River Basin

F. Construction Priority (10 points)

Points awarded for construction projects that can be completed within the project duration, focusing on hard infrastructure that delivers durable, long-term improvements in water reliability and resilience.

G. Cost Share Priority (5 points)

Additional points for non-Federal cost share contributions exceeding the statutory minimum of 75%. Higher cost share percentages may receive more points.

Buy America Requirements

Projects funded under this NOFO are subject to Buy America preferences:

• All iron and steel products must be produced in the U.S.
• All manufactured products must be made in the U.S. with substantial transformation and final assembly
• All construction materials (cement, concrete, etc.) must be sourced domestically

Application Requirements

Your application must include:

• SF-424 (Application for Federal Assistance)
• SF-424A (Budget Information)
• SF-LLL (Disclosure of Lobbying Activities, if applicable)
• Project Abstract Summary (award purpose, activities, deliverables, beneficiaries)
• Project Narrative (maximum 40 pages, addressing all merit review criteria)
• Budget Narrative (detailed cost justification)
• Letters of Support from stakeholders
• Letters of Commitment from third-party cost share sources

The full application, including attachments, cannot exceed 125 pages. The Project Narrative is limited to 40 consecutively numbered pages with at least 12-point font and standard 1-inch margins.

How to Prepare Your Application

1. Verify Your Registrations

Ensure your organization has an active SAM.gov registration and Unique Entity Identifier (UEI). SAM.gov registration can take several months. You must also be registered on Grants.gov with an Authorized Organization Representative (AOR) — allow 30 days for this process.

2. Submit Your Feasibility Study Early

Reclamation requests Feasibility Studies be submitted by April 13, 2026. Your study must meet the requirements of Reclamation's Directives and Standards WTR 11-01 and WTR TRMR-128. This review is a prerequisite for funding.

3. Address All Merit Review Criteria

Copy and paste the merit review criteria and sub-criteria into your Project Narrative to ensure every point is addressed. The NOFO explicitly recommends this approach.

4. Provide Detailed Economic Analysis

Include construction costs by year, annual O&M costs, projected project life, cost per acre-foot calculations, and a comparison to non-reclaimed water alternatives. Reclamation will calculate cost per acre-foot using the data you provide.

5. Demonstrate Cost Share Commitment

Include letters of commitment from all cost share sources identifying committed amounts, availability dates, and any contingencies. Exceeding the 75% minimum earns additional scoring points.

Important Dates

• Feasibility Study Submission: April 13, 2026 (requested)
• Application Deadline: May 13, 2026, 4:00 PM MDT
• Anticipated Award Notifications: ~6 months after deadline
• Anticipated Project Start: May 13, 2027
• Anticipated Project End: May 13, 2030

Related WaterSMART Opportunities

If your project doesn't meet the $500 million minimum threshold or you're looking for other water-related funding, consider these related programs:

• WaterSMART Applied Science Grants — Up to $400K for hydrologic modeling and water management tools
• Snow Water Supply Forecasting Program — Up to $1M for aerial LiDAR snow surveys
• WaterSMART Drought Response Program — Up to $1.5M for drought resilience projects

How Avila Can Help

Avila's AI-powered platform helps water authorities and local governments streamline the grant application process by:

• Matching your organization with relevant federal funding opportunities
• Simplifying complex NOFOs into clear eligibility and requirement summaries
• Helping draft compelling project narratives aligned with scoring criteria
• Tracking deadlines and managing the full application lifecycle

Book a demo to see how Avila can help you secure federal funding for your water recycling project.