Section 33E. The department of environmental protection may make a grant to a local governmental unit as defined in chapter twenty-nine C for the eligible costs of planning, design or construction of water pollution abatement projects eligible for financial assistance under section six of said chapter twenty-nine C. The department may award grants for such projects in accordance with regulations of the department promulgated pursuant to section twenty-seven A, in amounts which, when added to the financial assistance provided by the local governmental unit, or each city, town or other public body which is a member or other service recipient thereof, under the provisions of section six of chapter twenty-nine C, will result in total financial assistance provided to or for the benefit of such local governmental unit, city, town or other public body, as determined by the department equivalent to a grant of twenty-five percent of the eligible costs of such projects. Payments of financial assistance by the commonwealth pursuant to this section shall be made in accordance with a payment schedule established by the department with the approval of the secretary of administration and finance and may, at the department's direction, be applied to the reduction of the principal balance of loans to the local governmental unit made or approved under said chapter twenty-nine C.
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