Red River Valley Alliance

Red River Diversion Project (Fargo-Moorhead) - Financing

Industry
Infrastructure/Canal
Area of finance
Project & Infrastructure Finance
Region
North America
Countries
United States

Deal Overview

This project is a milestone PPP in the water market, marking the first project under the US Army Corps of Engineers PPP Pilot Program to reach financial close and the first flood protection / resiliency PPP in the US. The project involved numerous stakeholders and a mix of funding sources including...

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This project is a milestone PPP in the water market, marking the first project under the US Army Corps of Engineers PPP Pilot Program to reach financial close and the first flood protection / resiliency PPP in the US. The project involved numerous stakeholders and a mix of funding sources including sales tax revenues and water resource district special assessments to support the availability payments to the sponsor.  In addition, the grantor, the Metro Flood Diversion Authority, worked with the US Environmental Protection Agency to obtain one of the largest Water Infrastructure Finance Innovation Act (WIFIA) loans in the program's history to make construction milestone payments.  The project sponsors, Red River Valley Alliance, successfully reached financial close in October 2021 with a mix of long-term tax-exempt private activity bonds (designated as Green Bonds), a private debt placement and sponsor equity, along with a revolving credit facility to manage construction cash flows.  When complete, this project will enable 100 year flood protection from the 30-mile diversion channel, safeguarding the Fargo Moorhead Metro area from seasonal flooding and removing hundreds of thousands of homes from the floodplain.

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Deal Volume
$ 1.14bn
Financial Close
13 October 2021
Sources
Submitted by participant(s), Press release

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Projects

Red River Diversion Project (Fargo-Moorhead)

Greenfield
Canal
North America
United States
$ 2.75bn