
Carson Clark (pictured), Central Sierra Program Manager at the National Forest Foundation speaking at the Yuba I Aspen forest restoration and regeneration site.
Success Story: Forest Resilience Bond
April 01, 2025
Introduction – Calvert Impact’s history with Blue Forest
In 2018, Calvert Impact made a $1 million loan to the Yuba I Forest Resilience Bond (FRB) project to protect 15,000 acres of forestland in the North Yuba River watershed in California. The FRB is a financing mechanism developed by our partner Blue Forest, along with the World Resources Institute, to raise private capital to fund the upfront costs of forest restoration. Blue Forest is a conservation finance nonprofit that brings communities, finance, and science together to restore and protect our forests and watersheds.
Forest restoration helps reduce the risk of severe fire, improves watershed health, and protects water resources. It is an intricate, multi-step process that carefully tailors treatments, such as vegetation thinning, prescribed burning, invasive species removal, and planting native plant species, to the unique attributes of each landscape. By removing overgrown vegetation that fuels wildfires and restoring native habitat, forest restoration is key to strengthening the resiliency of forests and the communities that rely on the ecosystem benefits provided – including clean water, air, and recreation.
To continuously conduct forest restoration efforts, land managers like the USDA Forest Service need reliable and consistent funding to engage and pay experienced contractors; but with restrictions in federal budgets, it can often take years to fund this much needed work. The upfront capital provided by the FRB, through investors like Calvert Impact, allows the pace and scale of these restoration treatments to be accelerated and increases the US Forest Service’s ability to hire local contractors, supporting the local economy. In the Yuba I FRB project, multiple beneficiaries of restoration, including the USDA Forest Service, the State of California, and Yuba Water Agency, shared the cost of reimbursing investors over time.
Completed in 2023, the Yuba I FRB protected 15,000 acres of forestland, helped to restore 2,675 acres of ecosystems and 27,601 acre-feet of source water supply, sustained 72 jobs, and returned all investor capital.
How is the FRB structured?
The FRB financing structure is a public-private partnership that uses private capital to ease cash flow constraints. Using this model, multiple groups share the costs of forest restoration. Here is how the FRB model works:
- Building partnerships: Blue Forest builds partnerships with communities, land managers, governments, utilities, Indigenous Peoples, and nonprofits to design conservation finance projects that improve forest and watershed health. The team also looks for an experienced land manager – like the USDA Forest Service – who selects an organization – like a local forest restoration contractor – to serve as the implementation partner and manage the work on the ground.
- Evaluating the benefits: Working with beneficiaries, the team evaluates the benefits of these projects and uses this information to establish an economic, social, and environmental case for funding. Beneficiaries can be anyone who benefits from the work taking place – organizations like water and electric utilities, and agricultural producers.
- Private investment: The FRB financing vehicle is then brought to private investors, such as foundations and institutional asset managers, who provide capital to finance the work. This means critical financing is available up-front for restoration projects, enabling the work to happen at a faster pace and on a larger scale.
- The end result: When the project work is complete, the investors receive a financial return, and our communities and forests are protected from catastrophic wildfires for future generations.
How does Blue Forest impact the communities they serve?
The Western US is facing the threat of extreme wildfire and other climate-related disasters. Blue Forest’s goal is to accelerate ecological restoration in the region through conservation finance, enabling climate resilience for ecosystems and communities. Yuba I FRB focused on improving the ecological resilience of the North Yuba River watershed, a critical source of water and hydropower generation for downstream communities and agricultural lands, as well as a popular recreational destination for visitors interested in camping, fishing, and hiking. Blue Forest engages in collaborations with other organizations to accomplish its large-scale projects. Through the North Yuba Forest Partnership, a group of nine organizations including Blue Forest, Tahoe National Forest, Sierra County, National Forest Foundation, The Nature Conservancy, Yuba Water Agency, Camptonville Community Partnership, the Nevada City Rancheria of the Nisenan, and South Yuba River Citizens League, focused on forest health and resilience of the North Yuba watershed. The North Yuba Forest Partnership centers on forest restoration across 275,000 acres of public and private lands in the North Yuba River Watershed, including the $25 million, 50,000-acre Yuba II FRB that launched in 2021.
The North Yuba Forest Partnership also looks to achieve economic sustainability by creating a local economy centered around the waste wood currently cluttering the forest by supporting wood products businesses, as well as a renewable energy facility that utilizes biomass that would not otherwise have market outlets. The proposed facility, Camptonville Biomass Plant, will have the capacity to process 40,000 tons of material per year and will be fueled by the same clean electricity that is being produced from forest biowaste. Additionally, the North Yuba Forest Partnership is looking to create workforce development programs to educate students on forestry-related skills to generate jobs for the local community.
How did our loan have an impact on Blue Forest and the broader US conservation finance market?
Calvert Impact’s partnership was pivotal to the launch of the Yuba I FRB. Zach Knight, Co-Founder and CEO of Blue Forest, said of the partnership: “As a new asset manager, credibility was the most important and Calvert Impact’s name helped, as people knew the name.” In addition to Calvert Impact, the Rockefeller Foundation, Gordon & Betty Moore Foundation, and CSAA Insurance provided readily available capital for the project and added credibility for the FRB model. Calvert Impact also provided feedback on structuring and gave the Blue Forest team perspective on what institutional lenders would want to see in a transaction.
Calvert Impact’s name and partnership continued to carry credibility for Blue Forest, which leveraged the success of Yuba I to launch the Yuba II FRB in 2021. Since then, Blue Forest has expanded beyond the Yuba region, launching new FRBs and broadening their financial offerings through the FRB Catalyst Facility, which is expected to finance at least $50 million in forest restoration. With the Rogue Valley I FRB launching in 2023, the team continues to push forward and collaborate with partners to maintain forest restoration efforts on the West Coast. The team is also working on the Southern Oregon-Northeastern California I Watershed Resilience Bond, Upper Wenatchee Pilot Project, and the Upper Mokelumne I FRB, all of which launched in 2024.
Willie Whittlesey (pictured), General Manager at the Yuba Water Agency, at the New Bullards Bar Reservoir Vista Point overlooking the New Bullards Bar Dam, managed by the Yuba Water Agency.
What can we learn from Blue Forest’s success?
Blue Forest’s highly successful Yuba I FRB project set the groundwork for the creation of their subsequent forest restoration initiatives, enabling their work and impact to happen at scale. Their success highlights the importance of the following:
- Forest restoration is vital to the health of our natural landscapes, reducing the risk of severe fire, improving watershed health, and protecting water resources. Restoration activities are essential to achieving healthy forest ecosystems and increasing the resilience of the surrounding communities.
- Yuba I FRB demonstrated the importance of aligning investors with the beneficiaries of the work to efficiently fund forest restoration activities. Blue Forest brought together disparate stakeholders and experts, who previously operated in silos, to collectively create a solution and structure that successfully protects our forests.
- Through the success of Yuba I FRB, Blue Forest was able to effectively crowd-in the needed capital and demonstrate the importance of reliable funding. Reliable capital is essential to funding the restoration projects.
- Blue Forest demonstrated the importance of transparency and integrity of the impact they had through Yuba I FRB. Blue Forest clearly communicated the way the Forest Resilience Bond works, helping others to understand how the product affects and benefits the surrounding community and natural ecosystems.
We are proud to support Blue Forest in their work to bring communities, finance, and science together to restore and protect our forests and watersheds and look forward to following many more successful forest restoration projects to come.