Surety Bonds Protect Infrastructure Investment – The rated companies have continued to revise the environmental impact assessment model in the years since this blog post was published. For the latest information on Environmental Impact Bonds, click the button below.

Today, municipalities and public institutions are faced with multi-actor challenges such as stormwater management, coastal restoration and waste recovery. And for almost all of these challenges, the longer you wait to tackle them, the more extensive and costly they become. However, city budgets are stretched and often unable to meet demand. Looking at infrastructure investments alone, we face a $1.4 trillion shortfall by 2025. Given the urgency and cost, municipal decision makers may not be willing to accept new risks, even for repairs, but warranties do not have insurance that has the power to face these challenges. in a cost effective and environmentally friendly way.

Surety Bonds Protect Infrastructure Investment

The good news is that private investors are incentivized to help. Increasingly, they seek to generate positive social and environmental returns in addition to financial returns. In fact, from 2014 to 2016, there was a 33% growth in impact investing assets, with $45 billion under management in North America alone.

Investment Outlook 2023

At Quantified Ventures, we serve as a bridge between the growing source of capital from impact investors and social and environmental projects seeking to scale. We do this through results-based financing, also known as “Pay-for-Success” or “Environmental Impact Bonds”. By brokering strategic partnerships between leaders across all sectors, we are able to accelerate financing that will result in greater environmental, social and economic benefits.

The Environmental Impact Bond (EIB) is an innovative financial instrument that uses the Payment for Success approach to provide seed capital from private investors for environmental projects, either to pilot a new approach whose performance is uncertain, or to measure a solution. has been tested in a pilot program.

In its most basic form, investors pay upfront costs to deploy these environmental solutions. Following the implementation and evaluation of the system, the “paying orange” – whether it is a public body or a private company that benefits from these solutions – compensates investors with a amount linked to the achievement of the contractual results of the system. The bond process is designed to meet the needs of the borrower, whether to provide risk coverage in the event of default or to share benefits with investors and entrepreneurs to encourage maximum performance.

If the project works as planned, we learned that the intervention is effective. If the results are better than expected, the payer knows that they are getting a greater return on investment than expected and they can modify their future investment plans to identify the savings made by running fewer more efficient projects. If the project does not work, some projects require investors to reimburse the work, provide some guarantee to the payer and quickly reverse the trend by dividing the recovered costs. , by assessing and taking project risks, the EIB creates incentives to innovate. solutions.

Ames Construction History

In 2016, Quantified Ventures introduced its first-ever environmental impact agreement with DC Water and is working with cities across the United States to help them leverage impact investing for environmental projects.

Like 772 municipalities across the country, the nation’s capital has a combined sewer system. This means that since raw sewage and storm water flow through the same pipes in the DC Water treatment plant, 2 billion gallons of sewage flow directly into the Chesapeake Bay watershed. every year. Although DC Water’s solution is a $2.6 billion tunnel system designed to keep flood waters out of rivers, they learned halfway through the 20-year project that green infrastructure (for example, rain parks, permeable pavements, green roofs and rain barrels) are possible. , successful selection. However, green infrastructure has never been deployed on this scale before, leaving DC Water with questions and concerns about risk. DC Water is turning to quantified standards to model and advance this cutting-edge business. We got the investors involved to share the risk by investing in the nation’s first BEI, $25 million tax-free which was sold in a private placement to Goldman Sachs Urban Investment Group and Calvert Impact Capital .

Atlanta Mayor Keisha Lance Bottoms announced in March 2018 at the 17th Annual Parks and Greenspaces Conference that the city’s Department of Water Management would use BEIs to fund construction projects. green infrastructure that will improve the resilience of communities that have been damaged by flooding in recent years. Atlanta was chosen through a competitive process supported by the Rockefeller Foundation in which cities apply for pro bono support to organize BEIs to fund their urban environmental projects. “I am thrilled that the City of Atlanta is the first winner of the Environmental Impact Challenge,” Mayor Bottoms said. “My administration will maximize the environmental and economic benefits of this investment to help restore pride in the Proctor Creek watershed for Westside communities.” Through a partnership with a local bond broker, the city will become the first-ever region to offer publicly traded BEIs, allowing citizens to become investors in their own city.

Representatives from the Accounting Institute, Chesapeake Bay Foundation and Baltimore announced the city’s first environmental impact document on future green infrastructure.

Procore Global Infastructure

Stormwater is the single major source of nitrogen pollution that continues to increase in the Chesapeake Bay watershed. To address this issue, the Chesapeake Bay Foundation (CBF) is working with Quantified Ventures to introduce local Bay communities to a new way to fund green infrastructure for stormwater management. Baltimore was selected through a competitive process sponsored by CBF, which garnered support from the Kresge Foundation and an anonymous donor to provide pro bono support to cities in the Chesapeake Bay to set up BEIs . In March 2018, Baltimore Public Works Commissioner Rudy Chow (at the podium pictured above) announced from a green infrastructure site in Baltimore’s Harlem Park neighborhood that EIB money will help Baltimore fund 90 landscaping projects in more than a dozen areas. . Integrated EIB certification is attractive to municipal government, as is the opportunity to learn how to manage the operation and maintenance costs of green infrastructure projects over time. This method can be used throughout the Chesapeake region to meet water pollution goals and improve communities.

Rural investment is difficult. About 80% of US venture capital goes to San Francisco, New York and Boston. Ohio’s 3Cs (Cleveland, Columbus, and Cincinnati) often struggle to access investment capital, and it’s especially difficult for places like Athens County, Ohio’s poorest county. , labeled “economically depressed” by the Appalachian Regional Council (ARC). Through a competitive process, Wayne National Forest was selected as a promising investment candidate from multiple US Forest Service sites. We are evaluating the feasibility of funding a unique 88-mile cycle route designed for cyclists of all skill levels by linking investor compensation to economic development outcomes and increased revenue from tourism spending. These results will include increased visitor spending, which will translate into increased income and employment opportunities for the region. Quantified Ventures is proud to work with the US Forest Service on this project to determine if “Pay for Success” can be used to fund recreational infrastructure.

To address the world’s most pressing environmental challenges, we must increase private investment in new environmental solutions. One place where such solutions are sorely needed is Louisiana, where more than 2,000 square miles of coastal land has disappeared since the 1930s. As billions of dollars associated with the Deepwater Horizon oil spill in 2010 funnel to the Louisiana to be restored, these funds… which will be transferred over the next 15 years – are insufficient to meet all of Louisiana’s coastal restoration needs. To help meet these needs, the Environmental Defense Fund, in collaboration with Quantified Initiatives and with input from the Louisiana Coastal Protection and Restoration Authority, assessed the feasibility of an EIB to support wetland restoration. The EIB’s approach shows how the private sector can partner with government to implement coastal resilience projects in Louisiana in the near future while delivering a financial return to investors. It has the creative potential to support the restoration of coastal communities across Louisiana, in other Gulf States and beyond.

Many organizations contact us wondering if the EIB has the right expertise for an environmental issue they are working on. If you have a project, such as green infrastructure or a new sports initiative, waiting in the wings for budget approval and delayed revenue streams, the EIB could be the solution for you.

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Is there a new environmental intervention perceived as a risk that needs to be piloted? OR A proven hypothesis that needs to be scaled?

These questions do not always have easy answers. We work with our clients to explore the feasibility of the EIB’s approach and to tailor a business plan to the local context and stakeholder objectives. President Biden on November 15, 2021. The law authorizes $1.2 trillion in transportation and infrastructure spending, including $550 billion for “new” investments and programs. IIJA funding is broad in scope, covering power and energy infrastructure, expansion of internet access, water infrastructure, and more. Some of them

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