How S&B USA is Helping to Build Sustainable Climate Resilience in the Midwest

SUSTAINABILITY SPOTLIGHT

How S&B USA is Helping to Build Sustainable Climate Resilience in the Midwest

May 8, 2025

In the spring of 2009, leaders and residents of Fargo and West Fargo, N.D., and Moorhead, Minn., battled catastrophic flooding for weeks. Lives were upended as non-essential businesses and schools closed. Residents of all ages came together and filled over 7 million sandbags to reinforce levees and build flood walls around homes, businesses and entire neighborhoods.

The north-flowing Red River, a natural border between North Dakota and Minnesota that flows between Fargo and Moorhead, made history as it crested at 40.8 feet—some 22 feet above flood stage. The Red River’s tributaries flooded, too. The Sheyenne River crested two feet higher than the previous 1882 record, and the Wild Rice River topped out at 27.8 feet, nearly three times the 10-foot flood stage.

From this widespread destruction and the costly cleanup and rebuilding came innovation. Leaders formed a public-private collaboration and designed bold engineering solutions to create a long-term, sustainable and more resilient future against flooding. This collaboration demonstrates the growing need for communities to come together around investments in resilience projects that address climate, aging infrastructure and economic development challenges.

The solution is a comprehensive flood control project, known as the Fargo-Moorhead.

Area Flood Diversion Project

One of the main components of the project is a 30-mile-long stormwater diversion channel and associated infrastructure designed to protect 260,000 people and 70 square miles in the Fargo, West Fargo and Moorhead area. When completed in 2027, the comprehensive project will provide protection against a 100-year flood and resiliency against a 500-year flood—providing peace of mind for the community and future generations of residents while saving billions of dollars in public spending on future flood recoveries.

Additionally, when the project is complete and receives anticipated FEMA certification, thousands of homeowners in the area protected by the diversion channel will be removed from the risk area required to carry flood insurance estimated at $3,000 to $5,000 annually per home.

Pittsburgh-based S&B USA, a creator a safe and innovative infrastructure solutions, is a key player in this project as one of three infrastructure firms partnering with numerous public agencies to bring the bold resilience project to life.

S&B USA, ACCIONA and North American Construction Group formed the Red River Valley Alliance (RRVA) joint venture as the project’s developer. Each company has an equity stake in the project and also works together in a construction joint venture as the general contractor for the project. Additionally, RRVA is contracted to operate and maintain the stormwater diversion channel portion of the overall project for 30 years after construction is complete.

The Fargo-Moorhead Area Diversion project has already achieved a number of firsts:

• 1st public-private partnership (P3) with the U.S. Army Corps of Engineers
• 1st P3 water management project in North America
• 1st green finance initiative in the U.S. specifically designed for climate change
• 1st pilot project for using renewable biofuels to power heavy machinery

The first-of-its-kind P3 project to deliver the stormwater diversion channel portion of the project at $1.2 billion in construction costs is a symbol of what happens when the public and private sectors come together. Multiple partners, including local, state and federal officials from North Dakota and Minnesota, the U.S. Army Corps of Engineers, private sector firms, and universities are participants.

The Metro Flood Diversion Authority (MFDA)—led by 13 board members who represent the city commissions of Fargo, West Fargo and Moorhead, the county commissions of Cass and Clay counties, and the Cass County Joint Water Resource District—is the governmental entity responsible for administering the overall project. This includes ensuring safe and timely construction, land acquisition, mitigation efforts and environmental permit compliance.

The U.S. Army Corps of Engineers is a partner to the public-private partnership with responsibility for the Federal work consisting of construction of the southern embankment and associated infrastructure.

Now at the halfway point of construction, the Fargo-Moorhead project will deliver the 30-mile diversion channel, 19 bridge spans (including three railroad bridges) and two heated aqueducts. Also included are 14 drainage inlets and one outlet structure. The stormwater diversion channel is designed to keep water moving year-round and divert excess river levels to the west of the Fargo-Moorhead metro area.

Impactful and Sustainable Infrastructure

In addition to providing long-term flood protection and resilience, the FM Area Diversion also addresses seven of the United Nation’s 17 Sustainable Development Goals around improving health and education, reducing inequality and spurring economic growth—all while tackling climate change.

In fact, this project is one of five finalists, out of 61 entries, competing for the United Nations Economic Commission for Europe (UNECE) PPP and Infrastructure Award 2025 at the organization’s 9th UNECE International PPP Forum from May 14 to 16 in Belgrade, Serbia.

UNSDG #4: Quality Education

How the Project Supports the Goal: Apprenticeship programs, college recruiting and on-the-job training

UNSDG #7: Affordable and Clean Energy

How the Project Supports the Goal: Pilot program using renewable biofuels generated from hydrotreated vegetable waste oil to power the project’s heavy machinery, and use of hybrid equipment

UNSDG #10: Reduced Inequalities

Flood protection for all residents

UNSDG #11: Sustainable Cities and Communities

Fargo, West Fargo and Moorhead will be protected from flooding

UNSDG #13: Climate Action

Climate resiliency project

UNSDG #15: Life on Land

Heated aqueducts will allow year-round fish passage in the engineered river bottom for tributaries passing over the diversion channel; flood protection for water and land wildlife

UNSDG #17: Partnerships for the Goals

Partnership includes public, government, private companies, and universities

Model for Financial Sustainability

To close the gap between public funding and the project’s overall cost, RRVA employed a tailored approach as innovative as the engineering solution to meet the P3 portion’s construction cost of $1.2 billion. The financing package included a mix of private capital sources, including senior tax-exempt private activity bonds, senior secured notes, a revolving credit facility, and equity contributions from the sponsors.

This financing plan achieved several firsts and has been broadly recognized by independent organizations and the P3 industry. The project is both the first large-scale flood protection resiliency P3 and the first “green financing framework” for a P3 project in the U.S. The financing also received a second-party opinion from Sustainalytics, confirming it met criteria for being green, credible and impactful, aligning with Green Bond and Green Loan Principles.

Because the Fargo-Moorhead project can be replicated in other regions prone to river flooding and its green financing P3 model can be used for other types of infrastructure projects, it will be a national model for how to accomplish big projects, including improvements to water infrastructure. 

More Sustainable Features of the Stormwater Diversion Channel

• Efficient construction practices: minimize consumption of materials, emissions and fuel consumption
• Circular economy elements: reuse of aggregate, chipping of trees, reuse of timber mats, application of hydrostatic test water for dust control, and use of stormwater held onsite for hydroseeding, hydro-mulching and planting trees
• Construction elements: goals related to water, waste, energy and soil management, minimizing light pollution, controlling noise and vibrations, and ensuring public and stakeholder engagement
• Design elements: use of stainless steel to avoid rust, and pavement designed for a 20-year lifespan to limit renewal work
• Recreation elements: pedestrian crossings over the channel to enable access to hiking and biking trails
• Natural elements: planted 1,077 acres of native grasses and 3,508 of the 25,000 total trees planned
• Early coordination with resource agencies (Fish and Wildlife, EPA, North Dakota Game and Fish)
• Economic elements: the stormwater diversion channel work created thousands of jobs, with most hires from the local community, and purchased nearly all  construction equipment and vehicles from local businesses