Kitty Weisman, who coordinated the Southeastern Partnership for Forests and Water for almost eight years, is now working with Blue Forest as their Regional Strategy & Utilities Manager. In this role, she will develop regional strategies for partner engagement and collaboration in priority watersheds, and will develop and lead Forest Resilience Bond projects in the Pacific Northwest and other regions.
Blue Forest shares many priorities and goals with the Southeastern Partnership for Forests and Water. These include facilitating local stakeholder engagement in watershed stewardship, applying conservation finance to address the forest and watershed conservation funding gap, and understanding the challenges watershed partners face in accomplishing their various goals.
Blue Forest addresses the above goals through its flagship conservation finance tool, the Forest Resilience Bond, which deploys private capital to implement forest restoration and conservation projects. The Forest Resilience Bond is a public-private partnership that enables those who environmentally and economically benefit from forest restoration to participate in the solution at a landscape scale. This results in more work getting done faster and at a lower cost to the government and any participating stakeholders who would otherwise be directly funding this work.
There are three main components of the Forest Resilience Bond. First, it quantifies the benefits of a selected forest or watershed restoration project. This can enable financial commitments from organizations that value those benefits (beneficiaries), who would contribute over time. For example, a fuels reduction project (such as forest thinning and prescribed burning) may reduce fire risk around a power utility’s transmission lines, and it may improve water yield for drinking water or irrigation water. This reduced risk impacts a utility’s bottom line; their operations are less expensive when the watershed is healthy and stable. That savings has value that is realized over time, which can help them repay the loan.
Second, the Forest Resilience Bond establishes agreements and contracts that allow beneficiaries to make project payments for watershed stewardship projects over time rather than all at once. These funds are blended with other sources of funding like federal and state grants that traditionally pay for such projects.
Third, the Forest Resilience Bond raises up-front capital from “green” investors, which is used to create a flexible low-interest loan to fund project implementation in much the same way that a municipal bond works to pay for local road and bridge construction. There are many benefits to financing watershed health that save money. One benefit of financing the project with a loan is that a loan can pay contractors in fewer than 10 days of invoicing for the work, instead of the months which is common for reimbursable grants. Receiving payments quickly means that cash flows are more predictable for contractors, and project implementation can happen much faster than when funded with grants alone. This significantly speeds up the project implementation timeline, making a 12-year forest restoration project possible in just five or six years.
Blue Forest is currently implementing two Forest Resilience Bonds on the Tahoe National Forest in Northern California, the Yuba I and Yuba II FRBs, to address catastrophic wildfire risk with landscape-scale forest thinning, prescribed fire, and invasive species removal. The two Yuba FRBs have unlocked $16 million in payments from beneficiaries like utilities, corporations and state agencies to fund project implementation. Blue Forest was also instrumental in creating the North Yuba Forest Partnership, which has been a powerful source of collaboration for landscape-scale planning and has mobilized an additional $28.5 million in existing or planned restoration work. Benefits from these projects include reduced fire risk to local communities and businesses, reduced fire impacts to the local water agency, and improved source water protection for several drinking water supplies.
While the FRB is currently being applied to address catastrophic wildfire threats in the western US, it could also be used for a variety of other watershed conservation and stewardship needs, and it can focus on both public and private lands. It is a flexible tool that can be implemented on a pilot scale or at a larger scale to achieve resilience in the face of climate change.
The FRB does something that is much-needed: it provides an immediate influx of funding to landscape-scale watershed projects that currently must rely on the much slower grant reimbursement process. It speeds up a glacially slow funding reimbursement process by replacing it with a low-interest loan that is paid back over time by those who benefit most from the project being completed.
For more information, or to find out whether your project might be eligible for the Forest Resilience Bond, contact Kitty Weisman at Kitty@blueforest.org.