Orrick has been named as a finalist for the 2019 Grunin Prize for Law and Social Entrepreneurship for our work with Blue Forest, in partnership with the World Resource Institute, on the development of the first ever Forest Resilience Bond.
An Orrick team of energy & infrastructure, impact finance, public finance, corporate and tax lawyers provided over four years of pro bono support to develop the structure and contracts for the investment and collaboration amongst the utilities, implementation partners and the state of California. We provided legal support on the types of contracts and agreements needed to facilitate the transaction and creatively scoped, developed, explained and negotiated these contracts with various government agencies, nonprofit entities and public utilities and ensured that all the contracts worked together effectively to make the FRB possible. This was a significant challenge as these structures and contracts were a matter of first impression for the parties who hadn’t encountered these types of arrangements previously and had little to no experience with this type of public-private partnership.
Our team’s most significant challenge was in developing the FRB to be suitable both now and in the future. The approach we undertook was to make the FRB as flexible as possible – enabling the structure to be revised as needed. To accommodate multiple investors with varying levels of risk and return, we structured the FRB with predictable cash flows for conservative investors. And for more risk-oriented investors, we set up the FRB to be able to include variable, pay-for-success payments in the future. We also designed the FRB to accommodate various cash flows from beneficiaries, as well as other variable elements such as a reduction on fire suppression costs over time, improvements in water quality and quantity or an increase in electricity generated by hydro project assets – features that will be especially attractive to utilities and government agencies.