Orrick Advises The Climate Trust in Securing $5.5 Million Investment in Innovative Conservation Finance Fund


An Orrick team advised The Climate Trust in executing a milestone contract with the David and Lucile Packard Foundation – securing a $5.5 million Program Related Investment (PRI) to seed a first-of-its-kind carbon investment fund for climate change mitigation.

Climate Trust Capital, an independent firm of The Climate Trust, launched its Fund I investment fund earlier this year with backing from the U.S. Department of Agriculture’s NRCS Conservation Innovation Grant and an agreement to support the Fund from the David and Lucile Packard Foundation. Climate Trust Capital released a request for proposals in January to begin the process of building a pipeline of qualified projects, aiming to execute contracts with selected project partners by the end of 2016. With the Packard PRI funding secured, Climate Trust Capital is now ready to invest in Fund I projects.

Fund I is focused on supporting innovative, U.S.-based carbon offset projects in forestry, grassland conservation and livestock digesters, providing upfront capital in return for partial ownership of the resulting carbon credits. The upfront investment can be used by projects for requisite costs such as construction, development or land acquisition. As Climate Trust Capital assembles additional impact investment dollars to scale the investment fund, there are plans to offer further rounds of increased financing for deployment in 2018, allowing for expanded offers of financing to more sectors and developers.

The Climate Trust’s leadership highlighted Orrick’s pro bono legal support to the Fund I launch. “Even with access to PRI funding from Packard, the launching of Fund I would not have been possible without the considerable pro bono legal support of Orrick, Herrington & Sutcliffe LLP,” said Sean Penrith, Executive Director for The Climate Trust. “Procuring this caliber of legal expertise was a game-changer for Climate Trust Capital, as the legal costs associated with starting new funds can be a heavy burden. We couldn’t have asked for a more committed legal partner than Orrick, and we look forward to our continued collaboration as investments are deployed, and our fund becomes a reality.”

“Orrick was delighted to be able to assist in a worthwhile and important project,” said Bob Lawrence, Orrick’s Senior Counsel for environmental law. “Climate Trust Capital will help drive the development of innovative technologies that will reduce carbon emissions and expand financing options in the energy sector,” said Lawrence.

“We believe that offset projects can be an important and cost effective contributor to the U.S.’ stated climate reduction targets under the historic Paris Agreement,” added Kristen Kleiman, Director of Investments for Climate Trust Capital. “This significant investment from the Packard Foundation, as well as the valuable legal guidance provided by Orrick, will enable Climate Trust Capital to invest in vital offset projects that collectively make for big climate impacts, while leveraging our existing programs to attract private capital and further amplify our impact.”

Investments in conservation projects from the $5.5 million Fund I vehicle are expected to catalyze the development of four anaerobic digesters, three forestry projects and one grassland conservation program, collectively reducing 978,157 mtCO2e over their 10-year life. From a conservation perspective, this will ensure sustainable management on more than 20,000 acres of land, and greatly improve water and air quality domestically. These and other projects supported by Fund I will also be an important and cost-effective contributor to the U.S.’s stated climate reduction targets under the historic Paris climate accord, which went into effect on November 4.

Based on its success, Climate Trust Capital plans to scale the carbon investment fund to become a $500 million fund with the potential to reduce significant emissions both domestically and abroad.

Our team was led by Bob Lawrence and included Yong-Nam Jun, with substantial contributions from the following partners, associates and professional staff: Greer Mackebee, John Thomson, Jaya Velamakanni, Criselda Haro Sandoval, Ahmad M. Kasfy, Zachary Huey, Deborah Ann Abernathy, David Lin, Evgeniya Shakina, Andrea Ball, John Narducci and Doug Mintz.