The San Diego, California-based non-profit Blue Forest is an innovative climate finance organization that addresses pressing environmental challenges by developing regenerative ecological investment opportunities.
In partnership with the USDA Forest Service and the World Resources Institute, Blue Forest developed its signature environmental product, the Forest Resilience Bond (FRB), to overcome the funding gap for forest restoration and management.
As a first of its kind public-private partnership, the FRB enables private capital to catalyze public land management on National Forest land by valuing the resulting ecosystem services, thereby reducing wildfire risk and promoting ecological sustainability.
More recently, Blue Forest has also established Blue Forest Asset Management (BFAM), an investment management platform connecting investors to compelling, mission-aligned opportunities in a broader set of asset classes beyond FRB projects, such as private equity and private credit investments.
Now, on June 5, 2023, Blue Forest announced the launch of its first pooled investment vehicle for Forest Resilience Bonds (FRBs): the FRB Catalyst Facility, with initial commitments of $12 million.
The strategy will finance high-impact ecological restoration projects with revolving loans and catalyze Blue Forest’s expansion to new landscapes and communities, beginning with Oregon’s Rogue Valley region.
The launch of the FRB Catalyst Facility has been closely followed by its first investment: the Rogue Valley I FRB in Southwestern Oregon, a high-priority landscape for fire risk reduction and home to 7 of the 30 most wildfire-threatened communities in Oregon, according to the US Forest Service.
Working in partnership with the Lomakatsi Restoration Project—a nonprofit, grassroots organization that develops and implements forest and watershed restoration initiatives throughout Southern Oregon and Northern California—this FRB will help accelerate the implementation of two major forest health projects in the Rogue Valley.
Lomakatsi anticipates supporting dozens of full time and seasonal jobs through these projects.
The two projects, covering over 79,000 acres on the Rogue River-Siskiyou National Forest and adjacent lands, focus on reducing the risk of severe wildfire to the ecosystem and nearby communities. The projects will improve community wildfire protection and help safeguard some of the highest wildfire risk areas in Oregon, including 56,000 homes.
“It is my pleasure to support the expansion of the Forest Resilience Bond into Oregon,” said Liz Berger, acting Regional Forester for Region 6 (Oregon and Washington) of the USDA Forest Service. “This tool will support the Forest Service in confronting the wildfire crisis, and enable partners like Lomakatsi Restoration Project to protect communities and complete projects on a landscape scale.”
The FRB Catalyst Facility is targeting investments in at least 10 FRB projects in new, high-priority geographies and communities across the Western US.
The majority of these projects will finance forest restoration and wildfire risk reduction (resilience) on public lands, with others targeting additional restoration activities including post-fire recovery and integrated landscape and watershed resilience projects across public and private lands.
“Wildfires in the U.S. are increasing in frequency and severity due to the landscape-altering effects of past fire suppression policies and a changing climate. More than ever, it is essential to scale financing models for ecosystem restoration efforts that have the potential to reduce wildfire risk, improve watershed resilience and protect communities. The Rockefeller Foundation is a long-time supporter of Blue Forest and is excited to see the evolution of their work with the launch of FRB Catalyst Facility,” said Maria Kozloski, Senior Vice President of Innovative Finance at The Rockefeller Foundation, which invested in the Yuba I Forest Resilience Bond through their Zero Gap Fund, an impact investing collaboration with the John D. and Catherine T. MacArthur Foundation.
The Facility seeks to revolve its initial capital into more than $50 million worth of project activities. The strategy’s tailored structure will enable Blue Forest to finance a wide range of projects and generate positive social, environmental, and climate outcomes alongside financial return.
Development of the FRB Catalyst Facility was supported by The Rockefeller Foundation and Alumbra Innovations Foundation, the latter of which is also one of the Facility’s lead investors alongside the Conrad N. Hilton Foundation. Additional investors in the Facility include private foundations, impact asset managers, and several entities under the advisement of Align Impact, such as the Mighty Arrow Family Foundation.
“Blue Forest has always intended to amplify the impact of the Forest Resilience Bond by raising investor capital to finance not just one FRB at a time, but a portfolio of many FRBs,” said Blue Forest CEO, Zach Knight.
“The FRB Catalyst Facility immediately enhances our ability to support critical restoration work and its structure is also a great fit for mission-aligned investors,” he added.
By improving ecosystem resilience and function at the landscape scale, these projects are designed to reduce wildfire risk, improve forest health, provide protection to communities at risk for wildfire, create sustainable recreation opportunities, and build community awareness around land stewardship.
Image courtesy of Blue Forest.