P3 First: Innovative Funding Model Keeps $3.2 Billion Flood Protection Project Afloat

North Dakota is second only to the state of Louisiana when it comes to inland flood risk in the U.S., and protecting people, homes, businesses and property from the flooding of the Red River is critical, especially with the risk of serious floods growing.

A record-setting flood in 1997 crested at nearly 40 feet and caused $3.5 billion in damages in the Red River Valley, where the Fargo, North Dakota, and Moorhead, Minnesota, metropolitan area is located. In 2009, that record was broken with the Red River cresting at 40.82 feet and damages more than doubling.

Plans to offer permanent flood protection for the 235,000 residents in the Fargo-Moorhead metropolitan area, located in the Red River Valley region of southeastern North Dakota and west-central Minnesota, became even more critical.

Scheduled for completion by 2027, Jacobs serves as program manager and public-private partnership (P3) advisor for the Fargo-Moorhead Flood Diversion Project. A $3.2 billion program spanning more than a decade, our team also helped establish the organization and governance for the Metro Flood Diversion Authority (MFDA), the governing authority created for and managing the Fargo-Moorhead Area Diversion.

Project design began in 2011, but with the project struggling to obtain short-term federal funding, the final completion and flood protection date was being pushed by nearly two decades — even though the need was imminent. Applying an innovative, first-of-its-kind funding and implementation model, Jacobs, in collaboration with local leadership, worked to develop scenarios and economic options for the MFDA to keep the project on track.

Our team jumped in to help facilitate this delivery approach by working with bipartisan members of Congress to create the first-ever, public-private partnership program for the U.S. Army Corps of Engineers, and helped the Fargo-Moorhead Flood Diversion Project become its first pilot.

We worked with multiple administrations and Congress to secure more than $500 million in federal funding. In addition to the private-sector investment from the P3, project funding also includes local sales tax money, state money, U.S. Department of Transportation private activity bonds and a U.S. Environmental Protection Agency Water Infrastructure Finance and Innovation Act loan. 

The financing that brought the project to life also distinguishes it as the first flood protection/resiliency P3 in the U.S., and one of the first worldwide. Project Finance International selected the P3 as its Americas P3 Deal of the Year in January 2022.

“A project this complex, innovative and groundbreaking required a highly sophisticated and professional team to develop and implement,” says Joel Paulsen, Executive Director of the Metro Flood Diversion Authority. “Jacobs exceeded our expectations and they continue to meet the Authority’s needs as we progress through construction.”  

Jacobs is helping state and local government agencies across the U.S. secure federal funding for infrastructure projects, such as roads, bridges, transit systems and more. Funding was made available through the Infrastructure Investments and Jobs Act (IIJA) and other federal programs and grants. IIJA encourages these projects to include sustainability, equity and social value components. In 2022, we helped secure nearly $1 billion in federal funding for projects that make our cities and communities more connected and sustainable.

The Fargo-Moorhead Flood Diversion Project adds 25 miles of levees, 3 massive water control structures and a 30-mile diversion channel designed to reroute water around the Fargo-Moorhead community. A series of downtown levee and pump station projects, bridge raises and other infrastructure also is included, providing the community permanent protection from annual flooding.