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SMBC Closes $642MM Green Loan and $273MM Private Activity Bonds for FM Area Diversion P3

October 20, 2021, 07:10 AM
Filed Under: Energy

SMBC, a member of SMBC Group, closed a $642 million Green Loan and acted as Co-Managing Underwriter on $273 million of Private Activity Bonds (Green Bonds) for the construction of the FM Area Diversion Project in the Fargo-Moorhead area in North Dakota and Minnesota, the first public-private partnership (P3) with the United States Army Corps of Engineers.
SMBC was a mandated lead arranger, hedge coordinator, deal contingent hedge provider, administrative agent, and green loan coordinator on $642 million of Senior Secured Credit Facilities and acted as Co-Managing Underwriter on $273 million of Private Activity Bonds for Red River Valley Alliance, LLC. Proceeds from the transaction are being used to finance the construction of a flood diversion channel and associated infrastructure that will help prevent future flooding events from impacting the Fargo-Moorhead area.

“We’re very excited to play an integral role in helping to finance this critical infrastructure project in this area of the country,” said Adam Sherman, Managing Director, Head of Municipal and Infrastructure Finance, North America, at SMBC. “The FM Area Diversion Project demonstrates SMBC’s ability to provide multiple solutions and services to clients—from lending and underwriting, to hedge products and ESG coordination.”

“This transaction highlights SMBC’s commitment to financing sustainable projects and the role that public-private partnerships can play in building resilient infrastructure. SMBC’s infrastructure banking team has already developed a strong track record closing ESG financings, and the team stands ready to provide ESG solutions to our sponsor client base,” said Raymond DiPrinzio, Managing Director, Co-Head of Infrastructure Finance, Global Structured Finance, North America, at SMBC.  

Along with an international and local consortium of partners, including Acciona, Shikun & Binui, and North American Construction Group, Red River Valley Alliance, LLC will design, build, finance, operate, and maintain the project under a long-term project agreement.


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