Winston Infrastructure Team Closes First-Of-Its-Kind Climate Resiliency Project

Lauded as first-of-its-kind in the North American infrastructure market and among the largest climate change/resiliency projects in the world, Winston represented the underwriters, lenders, swap providers, and note purchasers in connection with the Fargo-Moorhead Metropolitan Area Flood Risk Management Project (the Project).

The Project was financed with $273,395,000 of tax-exempt private activity bonds (split into two tranches), a $642,560,812 revolving credit facility, and $197,761,478 of privately placed secured notes, the proceeds of which will be used by Red River Valley Alliance, LLC (RRVA) to pay a portion of the costs incurred for the design, construction, financing, operation, and maintenance of the Project.

Impact

In connection with the Project, RRVA established a framework that allowed the loans, notes, and bonds to be issued as “green,” which then allows allow for direct investment into debt that supports climate change adaptation and resilience projects—a novel arrangement in the current public-private partnership (P3) market. The Project involves a proposed 30-mile diversion channel, two aqueducts, two river inlets, drainage inlets, four railroad bridges, four interstate highway bridges, and 10 county road bridges, which will collectively help protect the Fargo-Moorhead-West Fargo metro area (Fargo, Cass County in North Dakota and Moorhead, Clay County in Minnesota) during times of flooding.

Not only is the Project the first flood management project in North America to be delivered as a P3, but also it serves as a blueprint for communities at risk of extreme flooding to similarly establish a flood risk mitigation protocol. With climate change expected to influence severe weather, including increased frequency and intensity of precipitation and exacerbated sea levels, both of which serve as catalysts to extreme flooding, the Project stands alone as a viable solution to minimizing damage to those communities situated in harm’s way.