The U.S. Environmental Protection Agency will provide a $34 million federal loan to help upgrade a stormwater system in Daly City, aiming to reduce flooding that affects communities in San Mateo County, the agency’s officials said Tuesday.

The low-interest loan, issued through the agency’s Water Infrastructure Finance and Innovation Act program, will support the Vista Grande Drainage Basin Improvement Project led by the Daly City Joint Powers Financing Authority. The project will expand stormwater capacity and reroute runoff to Lake Merced, helping stabilize water levels and improve regional water quality, the EPA said in a news release.

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