Climate Finance | February 21, 2019

Atlanta raises $14 million environmental impact bond from public

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, February 21 – Atlanta’s Department of Watershed Management has raised $14 million environmental impact bond through a public offering to minimize flooding and improve drainage in economically disadvantaged and flood-prone neighborhoods in the city. Impact advisory firm Quantified Ventures helped Atlanta structure the bond, while investment platform Neighborly partnered to make the offering available to the public.

Cities are increasingly confronting weather-related issues, like flooding during extreme storms, because their infrastructure wasn’t designed for the pace of urban growth or changing and intensifying weather patterns. Environmental impact bonds, which reward investors for backing projects that achieve positive environmental outcomes, are being used as a way for cities to finance greener infrastructure.

Atlanta and Baltimore going green with ‘environmental impact bonds’

Atlanta launched a public, 10-year bond last April to finance six neighborhood infrastructure projects that will restore streams, wetlands and floodplains, as well as some public areas near the city’s Proctor Creek watershed. Capital was raised via Neighborly, which allows individuals and investors to invest in community and municipal initiatives. Bondholders will be repaid based on the amount of stormwater captured by the green developments. (If the six projects capture at least 6.5 million gallons of water, investors can earn a 3.55% return.)

The city is also planning to partner with community organizations to look at how to integrate social initiatives, like workforce development for green infrastructure, Quantified Ventures Eric Letsinger told ImpactAlpha.

“Atlanta’s motivation for the [bond] is to address localized, neighborhood-scale issues of flooding and poor water quality,” Letsinger said. “These neighborhoods are also economically distressed, so Atlanta was also interested in using green infrastructure to create new community assets” that can be used for job creation, economic development, and recreation.

Atlanta’s environmental impact bond launched in April last year alongside a similar initiative in the city of Baltimore. Washington, D.C. launched the first environmental impact bond for stormwater management in 2016.