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Good practice Imported

North Yuba Forest Resilience Bond — Investor-Financed Wildfire-Risk Reduction for a Water-Supply Watershed

United States of America · Marysville · See the United States of America profile

Evidence: Observational / pre–post Top 33% 53/100 · Ask Evidence Copilot about this practice

The first Forest Resilience Bond raised US$4m in private capital from four investors to fund thinning and prescribed burns across 15,000 acres of the North Yuba watershed. Yuba Water Agency repaid investors on schedule as restoration finished in 2023.

4 US$ million
Initial bond size (Yuba I) (2018)
15000 acres
Area treated (Yuba I) (2018–2023)
6 US$ million (leveraging ~US$25m total)
Second bond size (Yuba II) (2021)
16800 acres
Area treated (Yuba II) (2021–ongoing)
80 US$ million (planned)
Planned further bonds for Tahoe National Forest (ongoing)
North Yuba Forest Resilience Bond — Investor-Financed Wildfire-Risk Reduction for a Water-Supply Watershed

Details

Maturity
Scaling
Promoter
Yuba Water Agency, Blue Forest Conservation & USDA Forest Service (Tahoe National Forest)
Period
2018–2023 (Yuba I); Yuba II 2021–ongoing
Keywords
forestry, wildfire resilience, water utilities, conservation finance

Context

The North Yuba River watershed in California's Tahoe National Forest faced growing wildfire risk after a century of fire suppression left forests overstocked, threatening both fire safety and the water supply Yuba Water Agency delivers to Yuba County; the US Forest Service lacked upfront capital to restore the land at the pace the risk demanded.

Objectives

Pre-finance forest-restoration work (thinning, meadow restoration, prescribed burning, invasive-species removal) using private investor capital, repaid by public agencies as restoration milestones are completed, rather than waiting for public appropriations.

Activities

In 2018, Blue Forest Conservation and the World Resources Institute structured the first Forest Resilience Bond: a US$4 million environmental impact bond funded by four investors (Rockefeller Foundation, Gordon and Betty Moore Foundation, CSAA Insurance, Calvert Impact Capital) covering a 15,000-acre planning area; the Forest Service carried out restoration on the ground, and Yuba Water Agency and the State of California committed to repay investors as milestones were met.

Results

Restoration on the Yuba I project area was completed in 2023, and investor capital was repaid in full on schedule — the first time private capital pre-financed US federal forest-restoration work at this scale. Based on that result, Blue Forest structured a larger second bond (Yuba II, 2021): US$6 million leveraging roughly US$25 million in total funding to treat a further 16,800 acres, with additional bonds worth some US$80 million planned for the wider Tahoe National Forest.

Conclusions

Because investor repayment is tied to completion of restoration activities rather than to verified wildfire-severity or water-quality outcomes, the model transfers financing and timing risk away from public agencies but does not itself constitute outcome-based payment for ecosystem services in the strict sense — a design trade-off flagged by conservation-finance researchers, including in an EPA review of the mechanism.

Implementation
Indicative cost
High (€500k–€5M) — Yuba I raised US$4m; Yuba II raised US$6m leveraging ~US$25m in total funding; further bonds worth ~US$80m are planned for the wider Tahoe National Forest — a high cost band reflects this cumulative, expanding capital scale.
Time to results
Medium (1–3 years) — Yuba I ran from 2018 to completion and full repayment in 2023 (five years); Yuba II began in 2021 and is ongoing, with further bonds planned — a multi-year, expanding programme.
Staffing & skills
Blue Forest Conservation and the World Resources Institute (bond structuring), USDA Forest Service (on-the-ground restoration execution), Yuba Water Agency and the State of California (investor repayment)

Conditions for success

  • Repayment tied to milestone completion rather than to a lengthy outcomes-verification process, giving investors a clear, bounded risk
  • A defined public repayer (Yuba Water Agency, backed by the State of California) willing to commit to contracted repayment rates
  • A well-understood, technically established restoration prescription (thinning, prescribed burning, meadow restoration, invasive-species removal)

Common failure modes

  • Repayment is tied to activity completion, not to verified wildfire-severity or water-quality outcomes — flagged by conservation-finance researchers (including in an EPA review) as a design trade-off rather than true outcome-based PES

Commonly funded by

Philanthropic / foundation funding

Indicative funding routes for practices of this type — always check each programme's current calls and eligibility rules.

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Data sources

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