With the support of the Rockefeller Foundation, the City of Atlanta Department of Watershed Management is pioneering the nation's first publicly-offered environmental impact bond (EIB) to fund green infrastructure in the Proctor Creek watershed. An EIB is an innovative financing mechanism that is unique in that it is linked to an environmental performance metric that determines the amount that investors are repaid by the bond issuers. The structural elements of an EIB include the identification of an outcome metric to determine success—in Atlanta's case the volume of stormwater captured by the GI practices—and the selection of two key bond terms: (1) performance threshold, e.g., volume of runoff captured at which a performance payment is made, and (2) performance payment amount. To set threshold point and performance payment, a volume-based probability model was developed in the design phase to determine the likelihood of successfully meeting the composite volume goal of the several GI projects.
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