Atlanta, Georgia Environmental Impact Bond for Green Infrastructure

The City of Atlanta, Georgia Department of Watershed Management is issuing an environmental impact bond (EIB), which will finance green infrastructure to address water quality, reduce flooding and improve stormwater management in Atlanta’s Proctor Creek Watershed neighborhoods. The $14 million EIB - the first to be offered on public markets - was the result of a partnership between the City of Atlanta, Quantified Ventures, the Rockefeller Foundation, and broker-dealer Neighborly. Supporting the expansion of EIBs into public markets, the Rockefeller Foundation will cover the costs of structuring a public bond with a grant to Atlanta - chosen from applicants of its 100 Resilient Cities network.   

Atlanta has experienced climate-driven extreme storms, repetitive flooding and combined-sewer overflows. This innovative financing mechanism will support the construction of green infrastructure to help improve stormwater and flood management, reduce the impact on water treatment systems, while improving the city’s environment and residents’ quality of life. Planned projects include bio-retention basins in parks, community greenspace, constructed wetlands, and stream and floodplain restoration.

Impact bonds are a form of performance-based financing, where repayment is based on how successfully the projects achieve environmental, social and economic outcomes for local communities. The Atlanta EIB pays out on the bond directly to benefits related to the volume of stormwater the projects successfully manage - thereby enhancing the City’s efficiency of funding, and quality of the designated projects.

According to outside analysts, the EIB’s benchmark is 6.52 million gallons of stormwater managed by green infrastructure financed through the bond. The $14.02 million bond has a 10-year maturity (investors will get their money back after 10 years), and an additional $1 million will be paid out pro rata to investors after 6 years if the stormwater management benchmark across the city’s six green infrastructure projects is achieved.

 

Publication Date: February 21, 2019

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