Introduction to Environmental Impact Bonds February 2019

Urban and Coastal Resilience Agriculture Forestry and Land Use Quantified Ventures Brings Impact Capital to Innovative Projects Current focus areas: Urban and Coastal Resilience Agriculture Forestry and Land Use

3 We Design Catalytic Health and Environmental Investments Pay for results, not process Accountability to outcomes Predictable evaluation Investor diversification and engagement Environmental Impact Bond Model Quantified Ventures has a commitment to social innovation, and to linking financial results to proven outcomes. MAKE GENERIC – Remove CBF; stormwater reference; red language MK – CAROLYN?

Daunting problems require innovative solutions – and innovative ways to pay for them Environmental Impact Bonds can help cities: Align incentives around social and environmental outcomes Manage political risk Transfer performance risk of innovative projects to investors Access new sources of investment capital Showcase themselves/projects as ‘open to innovation’ Engage other stakeholders benefitting from projects Collect performance data on outcomes Photo: WEF

DC Water Issued an Environmental Impact Bond to Fund A Portion Of Planned GI

WASHINGTON, DC ATLANTA, GA BALTIMORE, MD Summary of Urban Green Infrastructure EIBs WASHINGTON, DC ATLANTA, GA BALTIMORE, MD Primary Value Proposition of EIB What is the cost-effectiveness of green vs. grey infrastructure for CSO reduction? How can green infrastructure improve local flooding, water quality, and economic conditions? What are the ongoing operational costs and viability associated with green infrastructure? Size $25,000,000 $14,020,000 $6,200,000 (est.) Term 30 years (5 year re-tender) 10 years 7 years Placement Private Limited Public Structure 3-tiered 2-tiered Outcome Metric Volume capture (flow / runoff) Volume capture (capacity / storage) Plant survivability Regulatory Driver? Yes No Partial Types of GI Right of way planters Bioretention on public parks Stream & floodplain restoration Impervious surface removal

Agricultural Best Management Practices: Aligning Stakeholder Incentives EIB Goal: Deploy agricultural Best Management Practices to address water quality and flooding issues of downstream municipalities and water users Outcomes: reduced costs in addressing flooding and water quality issues

Transferring Risk & Engaging Stakeholders: “Protecting Coastal Assets EIB” EIB Goal: Accelerate investment in wetland restoration in Louisiana through engaging local asset owners as partners and payors Outcomes: Avoided land loss as a proxy for flood risk reduction Wetland restoration reduces the rate of land loss, thereby providing flood risk reduction benefits Local asset owners contribute to bond repayment assuming restoration efforts are successful

Multi-payor Transaction: Mountain Bike Trail Development, Ohio EIB Goal: Provide much-needed up-front capital to a recreation project and engage additional possible payors who benefit from the development Outcomes: economic development, health Constructing the Bailey’s trail, a 100-mile mountain biking trail system in the Wayne, will lead to greater utilization and visitation to the Forest Greater visitation will result in increased spending from local and out of town outdoor enthusiasts and increased economic activity for local communities Increased economic activity will result in job opportunities and tax revenue NOTE: TRANSACTION IN STRUCTURING PHASE; DETAILS SUBJECT TO CHANGE

Scaling a Proven Intervention: Urban Wood Reclamation EIB Goal: Scale operations of Humanim, social enterprise addressing urban blight in Baltimore through deconstruction, wood salvage, and resale Outcomes: job creation, blight elimination, landfill diversion

Possible applications and benefits for drinking water systems Both current and future use cases of EIBs have implications for drinking water systems: Access new sources of investment capital Create drinking water quality benefits using upstream conservation or green infrastructure projects Transfer performance risk of new solutions (e.g. water efficiency or metering technology) Address deferred maintenance problems with multiple stakeholders (e.g. lead line replacement, non-revenue water) Photo: naumoid, Getty Images/iStockphoto

Eric Letsinger, CEO letsinger@quantifiedventures.com