Diversion Authority Finance Committee and Board Chair recognize Sen. John Hoeven for Efforts to Move Low-Interest Project Funding Forward
May 7, 2020 – The Diversion Authority Finance Committee Chair Fargo Commissioner Tony Grindberg, and Board Chair Fargo Mayor Tim Mahoney today thanked Sen. John Hoeven for his recent work to secure Water Infrastructure Finance and Innovation Act (WIFIA) financing for the FM Area Diversion Project.
The Senator announced today the Project’s WIFIA application is now ready to be processed by the Environmental Protection Agency (EPA).
“Securing low-interest financing is a critical step we have been working toward for many years,” Commissioner Grindberg said. “WIFIA financing is one of the most attractive and cost-effective options out there and will save taxpayers a lot of money. Sen. Hoeven’s work to ensure our WIFIA application is processed is a great example of his dedication to this project and the importance of building strong, federal partnerships.”
“The WIFIA component of our financial plan is an innovative way to provide financing for a project like this. We are applying for $561 Million in long-term, low-interest financing that could mean more than $600 Million in savings on interest payments throughout the life of the loan,” he added. “This financing would not have been possible without the hard work of our local, state and federal partners working in unison.”
“Our relationship with our congressional delegation and federal partners is crucial to moving forward with building permanent flood protection for our citizens,” Mayor Mahoney said. “We are pleased to see the U.S. Army Corps of Engineers continuing to make progress building the Diversion Inlet and Control Structure south of Horace, and soon they will be starting the Wild Rice River Control Structure. These are exciting developments and I’m looking forward to this construction season.”
For more information about the FM Area Diversion Project, or WIFIA financing, visit www.FMDiversion.gov/WIFIA.
From the office of Sen. John Hoeven
HOEVEN SECURES ADMINISTRATION SUPPORT TO EXPEDITE WIFIA APPLICATION FOR FARGO-MOORHEAD REGIONAL FLOOD PROTECTION
Senator Worked to Advance Low-Cost Financing Option for Local P3 Project, Ensure EPA Moves Process Forward
WASHINGTON – Senator John Hoeven has worked with the Administration and the Environmental Protection Agency to secure support to expedite the application for a Water Infrastructure Finance and Innovation Act (WIFIA) loan to support flood risk management in the Fargo Moorhead region. Legislation approved last year requires the Administration to develop an approach across agencies for WIFIA loans, which could have held up the loan application. However, Hoeven worked to ensure that the EPA is able to receive and begin processing the loan application for the project, which will provide permanent flood protection in the region.
At an event with Environmental Protection Agency (EPA) Administrator Andrew Wheeler last year, Hoeven announced that the EPA had invited the Diversion Authority to apply for a $561 million loan. The senator has since been working with the Administration and the EPA to move the process forward and ensure access to this low-cost, flexible funding source, which:
- Removes the risk of increasing interest rates and provides lower rates than other financing options.
- Allows the project sponsor to draw down funds as needed, enabling less debt to be carried earlier in the project.
- Provides flexibility in its payback schedule.
- Could save the project at least $600 million in interest payments over the 40-year life of the loan, according to the project sponsor.
“Legislation passed last year required the Administration to develop a common regulatory framework across agencies for WIFIA loans, which will take some time to do and could have held up our application. The good news is that I got the Administration to agree that we can move forward with our project and submit a loan application to the EPA for the WIFIA funding. This marks another important step toward reducing the financing cost of building comprehensive flood protection in the Red River Valley,” said Hoeven. “We’ve worked hard to make this option available to the local project sponsors and we appreciate the administration for their efforts to help get this done and for the EPA’s willingness to begin processing the application as soon as it is submitted.”
Prior to the EPA’s invitation, Hoeven worked to advance the WIFIA program by:
- Holding a roundtable with local officials last year to outline the benefits of the WIFIA program.
- Securing funding through his role on the Senate Appropriations Committee for the EPA’s WIFIA program in Fiscal Year (FY) 2019.
- Passing legislation in the FY2019 Energy and Water Development Appropriations bill directing the Corps to complete a detailed plan for implementing its WIFIA program and providing up to $6 million for this effort. While the Corps works to implement its program, the project sponsors opted to utilize EPA’s WIFIA program.
- Leading the delegation in expressing support to Wheeler on behalf of the project’s Letter of Interest (LOI) for the WIFIA loan, and again urging the administrator to advance the project’s selection.
Today’s announcement is the latest in Hoeven’s work to fund permanent flood protection and bring down the cost to the Fargo-Moorhead Metropolitan Area residents. Earlier this year, the senator announced that the U.S. Army Corps’ of Engineers’ FY 2020 work plan includes $100 million for construction of flood protection in the Fargo-Moorhead region.
Hoeven previously hosted Assistant Secretary of the Army (ASA) for Civil Works R.D. James, who oversees the Army Corps, in North Dakota to give him firsthand knowledge of the project and to help secure this work plan funding. The $100 million will help to fulfill the federal government’s increased funding commitment, which Hoeven helped secure under the new Project Partnership Agreement (PPA).