; and (B) if the eligible entity uses funds as described in subparagraph (A), the funds used shall be reimbursed from the amount made available under the multiyear grant agreement for the project. (k) Undertaking parts of projects in advance under letters of no prejudice (1) In general The Secretary may pay to an applicant all eligible project costs under the program, including costs for an activity for an eligible project incurred prior to the date on which the project receives funding under the program if— (A) before the applicant carries out the activity, the Secretary approves through a letter to the applicant the activity in the same manner as the Secretary approves other activities as eligible under the program; (B) a record of decision, a finding of no significant impact, or a categorical exclusion under the National Environmental Policy Act of 1969 ( 42 U.S.C. 4321 et seq.) has been issued for the eligible project; and (C) the activity is carried out without Federal assistance and in accordance with all applicable procedures and requirements. (2) Interest and other financing costs (A) In general For purposes of paragraph (1), the cost of carrying out an activity for an eligible project includes the amount of interest and other financing costs, including any interest earned and payable on bonds, to the extent interest and other financing costs are expended in carrying out the activity for the eligible project, except that interest and other financing costs may not be more than the cost of the most favorable financing terms reasonably available for the eligible project at the time of borrowing. (B) Certification The applicant shall certify to the Secretary that the applicant has shown reasonable diligence in seeking the most favorable financing terms under subparagraph (A). (3) No obligation or influence on recommendations An approval by the Secretary under paragraph (1)(A) shall not— (A) constitute an obligation of the Federal Government