Financing High-Performance Infrastructure

The U.S. Department of Housing and Urban Development (HUD) issued a fact sheet describing ways that state and local governments can finance climate resilience investments using green bonds and other innovative financing strategies.  Green bonds can be used to finance investments in and retrofits to infrastructure to increase community resilience, including investments in renewable energy and grid resilience, clean transportation, drinking and wastewater infrastructure, and more.  The fact sheet provides a high level summary of some financing options including green bonds, catastrophe bonds, resilience bonds, and social impact bonds.

It also includes case studies of states and agencies that have used innovative financing strategies to support resilience investments: 

  • Massachusetts used green bonds to finance land acquisition, stream restoration, energy efficiency, and drinking water and wastewater resilience projects.
  • Metropolitan Transit Authorities (MTA) issued a "climate bond" to finance upgrades to transit in the New York City metropolitan region. The Georgetown Climate Center also wrote a case study on how MTA used catastrophe bonds to rebuild infrastructure more resiliently after Hurricane Sandy.
  • Iowa Finance Authorities used the Clean Water Act State Revolving Funds to issue green bonds to support local upgrades to drinking water and wastewater infrastructure.

The fact sheet also includes examples of innovative projects that were designed differently with climate change in mind.  The discussions are designed to help policymakers develop strategies for capturing the value of avoided costs to help with financing these types of projects that result deliver cost savings.  Examples include:

  • Spaulding Hospital in Boston, MA, which was built to withstand flooding with sea-level rise in mind and with resilient and more efficient energy systems that helped the hospital save $400,000 in operating costs in its first year of operation.
  • A University of Arizona building that was designed to save water and energy using passive energy systems. 

Finally, the fact sheet lists technical assistance programs and resources that can help policymakers develop financing strategies for resilience investments.

Publication Date: July 8, 2016

Related Organizations:

  • U.S. Department of Housing and Urban Development (HUD)

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Resource Types:

  • Best practice

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