Climate Finance
Atlanta: First Publicly Offered Environmental Impact Bond
Location: Atlanta, GA
Status: Complete
Quantified Ventures helped structure the first-ever publicly offered Environmental Impact Bond with Atlanta’s Department of Watershed Management. The $14 million bond, which closed on January 31, 2019, is financing six green infrastructure projects to manage stormwater in economically and environmentally distressed neighborhoods that previously lacked access to funding. The Environmental Impact Bond represents a novel approach to finance resilience projects across the United States.
Problem
Once a thriving and historic center for the Civil Rights Movement, calling Martin Luther King, Jr. a resident, the neighborhoods around Proctor Creek in recent years have become fraught with flooding, water quality, and other environmental and economic challenges. Proctor Creek’s “headwaters” now originate from runoff due to the proliferation of impervious surfaces such as parking lots, buildings, and highways in downtown Atlanta. This urbanization, combined with increasing rainfall, has put growing pressure on the area’s outdated stormwater and wastewater infrastructure. The watershed was included in EPA’s Urban Waters Federal Partnership, a collaborative effort to improve environmentally and economically distressed areas around urban waterways across the country.
Approach
Quantified Ventures worked with Atlanta’s Department of Watershed Management to create the first-of-its-kind Environmental Impact Bond to finance six green infrastructure projects in the Proctor Creek Watershed to manage stormwater, reduce local flooding, alleviate water quality impacts, increased access to green space, and create local green jobs. The first impact bond to use a public offering, the Atlanta EIB represents a pivotal step in demonstrating outcomes-based financing as a tool for the public municipal bond markets.
The EIB had a two-tiered performance structure and was highly rated by S&P (A+) and Moody's (Aa3). The high performance threshold was set at 6.52 million gallons of capacity for stormwater capture. The cost-effective methodology validates the total capacity of the projects to capture stormwater through as-built surveys and aerial imagery once projects are complete.
Impact
Atlanta’s Department of Watershed Management estimates that the green infrastructure projects have the capacity to absorb 55 million gallons of stormwater annually from flowing into the watershed. Additional co-benefits include hundreds of homes protected from future flooding, dozens of local sustainable jobs created, and increase access to green space with 100% of the green infrastructure implemented in economically distressed neighborhoods.
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