In late June, the Buffalo Sewer Authority closed on the largest Environmental Impact Bond (EIB) in the country to date, at $54 million. This investment will enable the City of Buffalo and Buffalo Sewer Authority to expand the Rain Check Buffalo program, originally launched in 2014 with a $380 million commitment under a consent agreement with the EPA. Under this new Rain Check Buffalo 2.0 program, Buffalo will use the bond proceeds to design and implement green stormwater infrastructure in an effort to reduce combined sewer overflows (CSO) while enhancing economic, environmental and public health benefits equitably. The pace of infrastructure installation is expected to increase from roughly 9.5 acres per year during 2014-2020 to more than 28 acres per year from 2021-2027 and the investment is expected to generate nearly 700 family-sustaining jobs in the community. The City of Buffalo and the Buffalo Sewer Authority were selected as the winner of the Great Lakes Environmental Impact Bond Challenge through the P3GreatLakes Initiative by Quantified Ventures and Environmental Consulting & Technology, Inc. (ECT). The investment is supported by Ralph C. Wilson, Jr. Foundation, Community Foundation for Greater Buffalo, and the Great Lakes Protection Fund.
Cities face massive stormwater challenges propagated by a changing climate. The Buffalo Climate Vulnerability Assessment estimates that by mid-century, the city is expected to see up to a four-inch increase in annual precipitation, so flooding is expected to worsen and place additional strain on Buffalo’s current stormwater infrastructure. Nature-based solutions can help mitigate the impacts of heavy rainfall, such as urban flooding and combined sewer overflows (CSOs), plus offer other climate adaptation benefits, such as addressing urban heat island effects.
EIBs offer a novel approach to finance high-impact projects based in part on the environmental, social, and/ or economic outcomes they produce. Through this EIB, Buffalo will become the first city to link a positive incentive to performance, as it targets the deployment of GSI on private properties with large amounts of impervious surfaces. Buffalo will pioneer the use of an EIB to provide property owners the ability to fund GSI projects, as these private properties are key to Buffalo’s vision of using GSI for the management of 500+ acres of impervious surface area, in order to reduce CSOs and help offset the impacts of climate change.
The investments will focus on six priority CSO basins that are home to 48% of Buffalo’s residents. These basins were selected based on social and economic equity considerations, in addition to stormwater management goals.
Quantified Ventures and DC Water pioneered the Environmental Impact Bond in 2016 to address stormwater challenges in the nation’s capital. In Buffalo, Quantified Ventures will build on its previous successes structuring green infrastructure EIBs in cities like DC, which also targeted CSOs, and Atlanta, which targeted flooding mitigation, access to green space, and workforce development opportunities in underserved neighborhoods, similarly to what Buffalo is now doing.
For more details, check out the recently published Yahoo! Finance article here or the earlier news release by the City of Buffalo and Buffalo Sewer Authority here.
For more about Buffalo’s original Rain Check program funded by the EPA and other Exchange member cities that have used EIBs to finance GSI development, click here.