Environmental Defense Fund (EDF) has started work on a pilot project to design the first ever Environmental Impact Bond (EIB) for wetland restoration. The Wetlands Restoration and Resilience Pay-for-Success Environmental Impact Bond project will evaluate the feasibility of using an EIB to finance a wetland restoration project from Louisiana’s Coastal Master Plan. The results of the feasibility analysis will be ready next summer.
EDF and its contractor, Quantified Ventures, will be working with Louisiana’s Coastal Protection and Restoration Authority (CPRA) to design the project. Key elements will include defining potential criteria for projects that could be financed under an EIB; evaluating suitable Coastal Master Plan projects; assessing potential cost savings to the state from implementing wetland restoration projects earlier; and identifying benefits of wetland restoration to private industries, which could become investors.
“We’re exploring new ways to bring additional financing to the table for coastal restoration in Louisiana – and beyond,” said Steve Cochran, EDF associate vice president for coastal protection.
Over the next 15 years, Louisiana will receive billions of dollars for restoration from Gulf oil spill settlements and other sources, but additional funding sources will need to be secured to fully implement the state’s $50-billion Coastal Master Plan.
“We’re interested in developing innovative financing tools, like Environmental Impact Bonds, that can get projects built sooner, and that may be a means for attracting new sources of capital from beneficiaries of wetland restoration,” continued Cochran. “This project aims to develop and demonstrate a model for how the private sector can partner with government to finance coastal resilience projects in Louisiana, with the potential for replication in other parts of the Gulf Coast, U.S. and globally.”
“CPRA is excited to partner with EDF and Quantified Ventures on this project. We are always eager to attract interest from the private sector in our work to restore and protect coastal Louisiana at CPRA. This opportunity to design these innovative bonds also lines up perfectly with the pay-for-success initiative we are undertaking,” said Johnny Bradberry, Chairman of the CPRA Board.
The Wetlands Restoration and Resilience Pay-for-Success Environmental Impact Bond project is funded by NatureVest, the conservation investing unit of The Nature Conservancy, through its Conservation Investment Accelerator Grant, which aims to find and support the best talent and most meaningful work in the field of conservation investment.