WASHINGTON--(BUSINESS WIRE)--i2 Capital, a specialty finance firm that sponsors structured investment vehicles for the impact investment marketplace, announced today it was the recipient of an $804,672 grant as part of the USDA’s $22.6 million Conservation Innovation Grants (CIG) program to support agriculture and conservation finance innovation. i2 Capital’s project is one of 33 selected to spur innovative conservation initiatives across the country.
The grant will be used to create a Pay-for-Success conservation finance vehicle that attracts private capital to fund water conservation interventions. i2 Capital will create an “Environmental Impact Unit™” that incentivizes municipalities and water companies to pay for investments in agriculture-based water quality conservation interventions that meet best practice models. The Pay-for-Success model will reduce adoption risk and drive agriculture-based water conservation approaches at scale.
i2 Capital is piloting its Pay-for-Success vehicle in Delaware and Pennsylvania in partnership with The Nature Conservancy in Delaware. During the past two-and-a-half years, TNC Delaware and the University of Delaware’s Water Resource Agency have worked together to create the Brandywine-Christina Healthy Water Fund, an investment vehicle designed to support freshwater conservation investments on farms in the Brandywine-Christina watershed. The William Penn Foundation provided more than $750,000 in critical project development funding for the Water Fund as part of its $35 million Delaware River Watershed Initiative.
In addition to TNC Delaware, i2 Capital has partnered on the Water Fund Pay-for-Success project with pioneers and leaders in the conservation finance field, including NatureVest, Stroud Water Research, Quantified Ventures and Environmental Incentives.
“The Pay-for-Success model will serve as a catalyst for municipalities and water companies to invest in the Water Fund and create a self-sustaining conservation finance vehicle that benefits farmers and fresh water consumers across Delaware and Pennsylvania,” said Ashley Allen, i2 Capital CEO. “We’re thrilled to lead this ambitious effort with a strong team of partners.”
The Pay-for-Success vehicle, when fully funded, will infuse up to $10 million in private investment in the Water Fund, with initial funding coming from philanthropic organizations and impact investors. The Water Fund will use this private capital to invest in USDA-compliant watershed conservation interventions that reduce nutrient and sediment loads from agricultural lands and advance Clean Water Act compliance. Beneficiaries of these outcomes – municipalities and water companies – will then repay philanthropic and private impact investors through the purchase of Environmental Impact Units™ that achieve stated environmental and regulatory goals.
“The USDA grant has the potential to greatly accelerate the Water Fund’s conservation impacts and help create a model for long-term, sustainable and scalable watershed restoration nationwide,” said Richard Jones, Delaware State Director of The Nature Conservancy. “We are excited to partner with such a strong group of national leaders in conservation finance to develop this innovative and groundbreaking solution.”
The Water Fund is one of only two national model Pay-for-Success efforts aimed at funding ag-based interventions across a watershed to drive downstream water quality improvements. The ultimate goal of the Water Fund is to restore the iconic Brandywine‐Christina watershed to swimmable, fishable and potable status by 2030. Feasibility studies and advanced computer modeling have deemed this goal achievable.
About i2 Capital
i2 Capital is an impact investment firm specializing in the conservation, education and energy sectors. With offices in Washington, D.C., New York and Jackson Hole, i2 sources and sponsors impact investment vehicles and provides impact investment advisory services to individuals, foundations, institutional investors and corporations. Learn more about i2 Capital at i2capitalcorp.com.
