Two Cities Will Get Chance to Raise Money for Green Infrastructure (Next City)

Two more cities will soon issue EIBs for infrastructure projects (not just stormwater management) — and the investors could be you or me.

Which two cities exactly will be determined in a competition announced by Neighborly, a company with a platform that makes it easy for the public to invest directly in municipal bonds via the internet, and the Rockefeller Foundation’s 100 Resilient Cities initiative.

“We need new models and financing mechanisms to produce more jobs, create new opportunities and build more resilient cities,” said Neighborly CEO Jase Wilson, in a statement calling for cities to apply.

Eligible EIB proposals must geographically include one of the cities that are part of the 100 Resilient Cities network (regional authorities that include a city in the network may submit a proposal). Among other factors, proposals will be judged on impact, including environmental impact as well as benefits to poor and vulnerable communities; the financial strength of the issuing agency or government; the size of the proposed transaction ($5 million or greater is suggested); and the scalability of the proposed project and finance approach within the city or to other cities.

Proposals may also incorporate multiple projects and aspects of environmental impact, such as stormwater reduction, clean energy infrastructure, water conservation, or recycling and waste reduction.

Read More

Can investors open the door to end family homelessness? (Urban Institute)

State and local governments are well positioned to explore the use of PFS to end family homelessness. Cuyahoga County, Ohio is already doing so. A PFS project there has attracted investors to pay for housing and services for homeless families in the child welfare system. The county will pay a return if the program reduces foster care placement days. Other PFS projects addressing a range of challenges have also originated at the state and local level

Ultimately, ending homelessness among families will require scaling from individual cities and states to a level that requires federal government as a significant partner. But in the face of looming cuts to housing programs, communities like Cuyahoga County can keep pressing forward. With repeated evidence of impact, demonstrated cost savings, and the engagement of private investors as housing partners, PFS projects could open the door to ending family homelessness.

Read More

Growing infrastructure needs require new funding approaches (Bond Buyer)

By shifting the risk of innovative projects from public agencies to investors, the EIB model presents an opportunity for municipalities across the US to invest in better, cheaper, and more resilient infrastructure and environmental solutions, and funders are starting to pay attention. The Rockefeller Foundation recently issued Quantified Ventures a grant to offer our services pro bono to more cities through an EIB Challenge. Working with Neighborly, an online broker-dealer for municipal finance, the next EIBs will also be the first publicly marketed EIBs, allowing these cities to access a broader investor base. As the market for EIBs continues to grow, more state and local governments around the country can benefit from greater and easier investment in innovative projects.

Read More

Startup Seeks Cities to Test Bonds that Put a Twist on Pay-for-Success (GovTech)

DC Water’s project, which involved using water-absorbing “green infrastructure” instead of tunnels to help avoid too much rainwater overwhelming the sewers, was a sort of trial balloon for the concept. In that instance, they issued the bond privately to Goldman Sachs and the Calvert Foundation.

In Neighborly’s project, the startup is looking to open up the bonds to a wider pool of purchasers. In fact, that’s what Neighborly was founded to do — the startup’s goal is to allow average people to buy municipal bonds. In the context of EIBs, then, people could use the platform to invest in environmental projects in their own cities and then earn a payback on it.

“The humble municipal bond is the original impact investment,” said Neighborly CEO Jase Wilson. “It’s been funding things like parks and schools and libraries since longer than that’s been a term.”

The Neighborly program isn’t limited to projects to absorb rainwater, either. In preliminary talks with cities, Wilson said he’s heard ideas ranging from sea walls to electricity microgrids.

“We don’t know what happens when we open the flood gates on the project, but it’s shown us that there’s a world of innovative projects waiting to be financed,” Wilson said.

And there are, potentially, a lot of areas where the project’s organizers think the model could work. Because the purpose of the EIB is to provide peace of mind through risk reduction, it could theoretically apply to any project where the government isn’t totally sure that the project would work.

Read More

Quantified Ventures and Neighborly Launch Green Infrastructure and Resilience Challenge (CivSource)

Quantified Ventures and Neighborly have launched an Environmental Impact Bond (EIB) Challenge at the Mayors Innovation Project Summer Meeting in Burlington, Vermont. Quantified and Neighborly are joined in the challenge by support from The Rockefeller Foundation.

The challenge judges will choose two US cities or counties to issue the first publicly marketed EIBs. Proceeds from these bonds will be used to finance green infrastructure for stormwater management, or other projects aimed at building resilience for vulnerable or low-income communities. The winners will receive pro bono services in planning, structuring and marketing EIB issuances from Quantified Ventures and Neighborly.

Read More

Climate Bonds Pioneered by Goldman Lure Storm-Plagued Cities (Bloomberg)

As climate change pushes U.S. cities to build protections against stronger storms and more frequent floods, the Rockefeller Foundation is helping cities with a novel kind of financing, one that transfers some of the risk of innovative projects from cities to investors.

The foundation, established with John D. Rockefeller’s oil wealth, announced Wednesday it will pay $342,000 to underwrite the costs for two municipalities in issuing environmental impact bonds, pioneered by The Goldman Sachs Group Inc. and Washington, D.C. More than a dozen cities have expressed interest in the bonds, which link an investor bonus or penalty to how well the underlying project works.

"You take the risk off the project not working" for city officials, said Saadia Madsbjerg, who leads the Rockefeller Foundation’s work on financial innovation. "There are many, many municipalities that have the exact same problem that D.C. has."

Read More

Using Pay For Success to Improve Youth Outcomes: A Review of Third Sector Capital Partner’s First Cohort of SIF Sub-Recipients (America Forward)

In 2014, Third Sector Capital Partners was part of the first cohort of grantees to receive funding through the newly minted SIF PFS program. With its $1.9 million award, Third Sector ran a competition to select sub-recipients interested in performance-based solutions to receive PFS technical assistance and feasibility assessment support. In its first sub-recipient cohort, Third Sector worked with nine communities and organizations all with a commitment to supporting high-quality, effective social interventions that produce measurable outcomes in the areas of early childhood education and health, child welfare, teen pregnancy, and workforce development.

With work associated with this cohort now complete, below is a synthesis of some of the primary areas of focus for the jurisdictions and elements that drove the technical assistance and feasibility support provided by Third Sector.

Read More

Brandywine-Christiana Watershed Pay-For-Success Project To Bring Up To $10 Million In Private Capital For Farm Conservation Projects (PA Environment Digest)

For the past three years, under a grant from the William Penn Foundation, The Nature Conservancy in Delaware and University of Delaware Water Resource Center have worked closely with water companies and municipalities on both sides of the Delaware-Pennsylvania state line to develop the Brandywine-Christina Healthy Water Fund.  

The Water Fund, an innovative conservation-finance vehicle, is designed to dramatically accelerate freshwater conservation in the ecologically and culturally rich Brandywine-Christina watershed.  

This summer, the Water Fund project received a tremendous boost when i2 Capital, a Washington, D.C.-based specialty finance firm, was awarded a $804,672 grant from the Natural Resources Conservation Service (NRCS) of the U.S. Department of Agriculture (USDA) to build a Pay-for-Success financing mechanism that will infuse the Water Fund with up to $10 million in private capital.

The grant is part of the NRCS Conservation Innovation Grant program.  

Read More

P3s for Social Impact (National Law Review)

In addition, many government agencies are exploring a new type of performance-based P3 investment called a social impact bond.  Social impact bonds were first used in the UK earlier this decade and have spread to the U.S. over the past few years. With a social impact bond, the government pays for particular social outcomes instead of infrastructure.  For example, the government could issue a social impact bond that pays a specified amount for private interventions that provide a measurable decrease in prisoner recidivism, and the amount paid would be based on the government’s savings from reduced recidivism.  In addition to recidivism, social impact bonds have been used for reductions in homelessness, early child education,  and health care.  The model encourages innovation in the private sector for the achievement of beneficial social outcomes and ensures that the public sector only pays for actual successes.

Although P3s will continue to serve an important role for the provision of transportation infrastructure and other traditional public facilities, P3s can play an important role in the provision of social infrastructure and social services.  The model is flexible, encourages creativity, and can be adapted to achieve nearly any social good.

Read More

‘Public safety crisis’ from downtown homeless sparks major changes (KXAN)

Ann Howard with ECHO explained that in the long term, she sees a funding gap as big issue to combating homelessness in Austin.  She believes it will take more public and private partnerships like these to come up with a sustainable solution.

“We need more funding than is currently available, so all the different initiatives we’ve heard about whether its the call for the downtown puzzle pieces or a new funding model called Pay for Success, we need all of that money — and then some — to end homelessness,” Howard said.

Read More