RELEASE: New Forest Resilience Bond will Finance $25 Million of Restoration to Reduce Wildfire Risk on the Tahoe National Forest in California
The innovative financial mechanism builds on the initial 15,000 acre pilot project to protect an additional 48,000 acres with funding contributions from utilities, corporations, and state agencies
Sacramento, CA (October 26, 2021)—World Resources Institute (WRI), Blue Forest (BFC), National Forest Foundation (NFF), US Forest Service (USFS), Yuba Water Agency (YWA), and the North Yuba Forest Partnership (NYFP) are pleased to announce the launch of the second Forest Resilience Bond (FRB): the Yuba II FRB. The new FRB on the Tahoe National Forest will finance $25 million in forest resilience and post-fire restoration projects in California’s Sierra Nevada mountains to restore 48,000 forested acres, protect nearby communities, and enhance water security.
The announcement is timely given the world’s focus on nature and climate at the UN Climate Change Conference (COP26) in Glasgow and the attention on recovery efforts underway following the devastating wildfire seasons of recent years. The 2021 Dixie fire, the single largest wildfire in California history, burned nearly 1 million acres and cost over $610 million to suppress.
Eli Ilano, Tahoe Forest Supervisor, is prioritizing forest resilience treatments to counter the growing threat of wildfire: "We want to keep the Tahoe National Forest safe and healthy long-term so all Californians can continue enjoying everything this landscape provides including outstanding recreational opportunities, water supply and other natural resources. This bond will help us finance prevention strategies to stave off the ever-present risk of catastrophic wildfire that can damage national forests and our neighboring lands. Efforts like these are crucial as the California landscape faces record-breaking wildfire behavior."
Supporting the FRB on the Tahoe National Forest is part of a broader effort by the US Department of Agriculture (USDA) to bring new resources to forest management. "Public-private partnership models, like the FRB, that leverage private investment for public good are integral to the paradigm shift needed to address the risk of catastrophic wildfire across the West,” says Meryl Harrell, USDA Deputy Under Secretary for Natural Resources and Environment. “Yuba II demonstrates that the FRB can be scaled to support the Forest Service’s goal to treat 20 million acres of National Forest System land over the next decade to mitigate the risk of wildfire in the West."
Yuba Water Agency (YWA), a local government agency responsible for water supply reliability, is funding the FRB in their source watershed for the second time. Building upon their initial $1.5 million commitment to the 2018 Yuba pilot project, Yuba Water is now making an additional $6 million commitment to support funding for the larger Yuba II FRB. Yuba Water’s natural infrastructure funding also leverages state and federal dollars in both projects.
“Our investment and partnership in the first FRB proved to be greatly successful in helping advance forest resilience work at a much faster pace and scale,” said Willie Whittlesey, Yuba Water’s general manager. “It was a logical next step for Yuba Water to commit funding for the Yuba II Project, to build on that momentum and continue to advance work to reduce the risk of catastrophic wildfire and protect our communities and water supply.”
Landscape Scale Planning with the North Yuba Forest Partnership
The Yuba II Project is supported by the collaborative work of the North Yuba Forest Partnership (NYFP), founded in 2019. The NYFP is a diverse group of nine organizations including BFC, NFF, USFS, YWA, South Yuba River Citizens League (SYRCL), Sierra County, Camptonville Community Partnership, Nevada City Rancheria, and The Nature Conservancy—all committed to forest health and the resilience of the North Yuba River watershed. The goal of the partnership is to collaboratively plan, analyze, finance and implement forest restoration across the entire 275,000 acre North Yuba River Watershed. The Yuba II FRB is the collaborative’s first step in accomplishing that goal.
“As we embark on forest management planning at this unprecedented landscape scale within Sierra forests, we knew we’d have to implement it in phases, due to capacity and funding. With the Yuba II FRB, we will be able to see progress on the ground sooner than anticipated,” said Melinda Booth, executive director at SYRCL.
New and Repeat Investors Supporting Environmental Finance
Four market-rate investors are participating in the Yuba II FRB, including Hall Capital, ImpactAssets, RSF Social Finance, and repeat investor CSAA Insurance Group. “We recognize the importance of investing in solutions that help reduce risk and protect our communities,” said Gretchen Tai, vice president of investments for CSAA Insurance Group. “The FRB continues to deliver sound financial results while addressing important environmental and safety concerns, and we are glad to extend our support.”
The Gordon and Betty Moore Foundation (GBMF) acted as the lead investor for the $3 million Program Related Investment (PRI) component of the FRB, alongside the Inherent Foundation. A PRI is a mission-aligned investment made by a foundation that yields a below-market rate of return.
“We are happy to once again be able to support Blue Forest Conservation and invest in a new and larger FRB. The innovative financial structure, multi-stakeholder partnership, and effective valuation of ecosystem services that lie at the core of the FRB also mirror our program’s approach and priorities,” said Dan Winterson, the Moore Foundation’s San Francisco Bay Area Program Officer. “This effort will have real, measurable impact on both water resources and wildfire risk at a significant scale.”
Pioneering Corporate Support for Water Resilience and Forest Health
The larger Yuba II FRB will protect more acres than its predecessor and expands the pool of funders by introducing corporate support into the FRB funding model. Garnering corporate support for financing models to leverage utility and state funding was one of the primary goals of a recent grant from the USFS Innovative Finance for National Forests program to WRI, Bonneville Environmental Foundation (BEF), American Water Works Association (AWWA), and BFC.
Through a partnership with BEF, plant-based food and beverage brand Silk, whose parent company is Danone North America, one of the world’s largest certified B Corporations, is leading by example in funding Yuba II. “Time is not on our side when it comes to the climate crisis. As part of the B Corp movement, we believe it’s our responsibility to do more than provide a product to our customers. We’re investing in forests because of the direct link between forest resilience, water quality, water quantity, and plant-based food systems that are essential to our business, to community health, and to our planet,” says Deanna Bratter, VP of One Planet One Health at Danone North America.
Corporations are increasingly concerned with wildfires and drought and the associated water-related risks to their supply chains, facilities, and bottom lines. “Silk’s early display of leadership by funding the Yuba II FRB will help restore forests and advance water replenishment,” said Todd Gartner, WRI’s Cities4Forests Director. “This sets the stage for other companies, whether food and beverage, consumer goods, or technology, to move beyond basic water related target setting towards collective action solutions that restore nature and protect human health.”
Catalyzing On-the-ground Action for Forests
While Blue Forest acts as the lead project developer and investment manager of the Yuba II FRB, NFF will act as project implementation manager, responsible for contracting and executing the restoration work on the ground. “National Forest Foundation is excited to build off of the work completed on the Yuba Project in order to expand the implementation of forest health projects across the watershed. This collaborative effort is important for increasing forest resilience, supporting forest industry capacity, and enhancing ecological services provided by the North Yuba River watershed,” said Matt Millar, NFF’s California Program Manager for the Tahoe Area.
Planned forest treatments are slated to begin in the fall of 2022 and will include fuels reduction through prescribed fires and selective thinning, post-fire restoration treatments, removing invasive plant species, and supporting development of mature forest habitat.
At 48,000 acres, the Yuba II FRB represents a significant increase in scale over the 15,000 acre pilot and opens the opportunity for even more ambitious action. Zach Knight, Blue Forest CEO, has a larger vision: “We are working with National Forests across the West to bring the FRB model to new states and new ecosystems. With the FRB, we can accelerate the pace and scale of forest management treatments across millions of acres over the next decade - reducing the risk of wildfire, enhancing water security, and benefiting ecosystems and local communities for years to come.”
About World Resources Institute
World Resources Institute (WRI) is a global research organization that spans more than 60 countries, with international offices in Brazil, China, India, Indonesia, Mexico and the United States, regional offices in Ethiopia (for Africa) and the Netherlands (for Europe), and program offices in the Democratic Republic of Congo, Turkey and the United Kingdom. Our more than 1,400 experts and staff turn big ideas into action at the nexus of environment, economic opportunity and human well-being. More information at www.wri.org or on Twitter @WorldResources.