Orrick Advises Goldman Sachs and Calvert Foundation on the Nation’s First Environmental Impact Bond


Orrick has advised Goldman Sachs Urban Investment Group and the Calvert Foundation in their purchase of a $25 million, tax-exempt Environmental Impact Bond (EIB) – the first such bond issued in the United States. The DC Water and Sewer Authority (DC Water) issued the bond to fund the green infrastructure project in its DC Clean Rivers Project, a $2.6 billion program to control stormwater runoff and improve the District’s water quality.

The proceeds of the bond will be used to construct green infrastructure practices designed to mimic natural processes that absorb and slow surges of stormwater during periods of heavy rainfall, reducing the incidence of sewer overflows that pollute the District’s waterways.

The EIB is structured using an innovative financing technique whereby the costs of installing the green infrastructure are paid for by DC Water, but the performance risk of the green infrastructure is shared by DC Water and the investors. As a result, payments on the EIB may vary based on the success of the environmental intervention as measured by a rigorous evaluation.

By financing this project through the EIB, DC Water seeks to create a model funding mechanism that other municipalities can leverage to advance the use of green infrastructure.

The Orrick team advising on this transaction was led by public finance partner Darrin Glymph and included assistance from tax partners George Wolf, Ed Oswald and Chas Cardall.