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Atlanta’s Seeing Green

Andrea Barrios — Former Portfolio Manager, Innovative Finance, The Rockefeller Foundation
Ben Cohen — Senior Associate, Quantified Ventures


As the first city within the 100 Resilient Cities to publicly issue environmental impact bonds, the City of Atlanta is boldly advancing a movement to make cities more resilient.

Photo by Joey Kyber on Unsplash

Being first can be daunting. Being first means risking that no one else will follow or understand what you are trying to achieve. For us, it’s in our DNA to take on these risks.

Why? Because we face a massive funding gap to achieve the Sustainable Development Goals—particularly those advocating for clean water and climate action. The Rockefeller Foundation’s Innovative Finance portfolio is playing a catalytic role in closing that gap by supporting the next generation of financing solutions. It’s not only about finding the most innovative ideas, but also about scaling capital through the adoption of these new tools.

Today, the City of Atlanta is taking an important step toward not only building resilience in the face of climate change but at the same time bringing much-needed green space to the neighborhoods where it is needed most.

How we got here

Let’s start at the beginning. In September 2016, Quantified Ventures worked with DC Water to create the first ever environmental impact bond (EIB) to fund green infrastructure (such as rain gardens and permeable pavement) to control stormwater runoff and improve the water quality and health of their residents. An EIB is a form of a municipal bond or other debt that raises funds for environmental projects and pays interest to investors based on the performance of that project. In other words, if the project accomplishes the government’s goals—such as a minimum volume of stormwater captured on the project site—the interest rate is as expected by both parties.

If the project underperforms, the investors pay back some of their interest so that the government can make modifications to the project or try something different to accomplish the same goals. This gives local governments room to experiment with ways of protecting their residents against the impacts of climate change by providing a sort of insurance against the failure of projects. For investors and governments, there’s an upside, too. If the project performs better than expected, the government shares some of the savings with investors through a bonus payment. All interests are aligned. The DC Water EIB was privately placed with Goldman Sachs Urban Investment Group and Calvert Impact Capital and received accolades across a variety of industries, including impact investing, municipal finance, and environmental protection.

An opportunity for building resilient cities

While many cities knew about and were even impressed by DC Water for issuing the EIB, many have been fixated on the specific terms, type of project, or sophistication of DC Water and waited for others to follow first before embracing this new model to advance their plans and needs.

We saw an opportunity.

Quantified Ventures and The Rockefeller Foundation’s 100 Resilient Cities set out to find the next few cities willing to take the leap. We also partnered with Neighborly, a registered broker-dealer that connects municipal finance with local investors.  Working together, we launched the EIB Challenge. At its core, this project focuses on how green infrastructure and related resilience projects will benefit our poorest and most vulnerable community residents.

Enter Atlanta

We are excited to announce the City of Atlanta Department of Watershed management will be the first ever publicly offered environmental impact bond. Atlanta’s projects will target mitigating localized flooding, water quality, and urban heat island issues, as well as increasing the neighborhood’s access to green space and connectivity to the rest of the city and the planned Boone to Beltline project.

Not only is Atlanta offering a new way to structure an environmental impact bond they are also playing an influential role in the new municipal finance movement by pushing us past the tipping point. EIBs are also under consideration by organizations like the Environmental Defense Fund, which is looking at ways to protect wetlands in Louisiana, and in rural areas like Wayne National Forest in Ohio, which would like to install a mountain biking trail to attract visitors and revenue to the area while increasing funding for ecological protection.

This is just the beginning.

Could your city be next? Learn more:

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