A Bay Journal article (2019-10-10) explored an innovative series of stream restoration projects being undertaken by Ecosystem Investment Partners (EIP) in Cecil County with a mix of State and County funding. The six bundled projects are unique due to their size (covering 15 miles of streams) and financing (EIP is fronting the costs and the State and County will only pay when the projects are finished and actually reducing pollution.
EIP, a Baltimore-based firm, was founded in 2006 and only recently began doing projects related to Chesapeake Bay restoration. The article indicated the company has conducted 62 restoration projects in 11 states.
EIP believes that by doing larger projects, you can lower th per-pound cost of nitrogen, phosphorus, or sediment reduction. Unlike more traditional stream restoration project developers, which are paid for part of the project up front and then in installments as the project is underway, EIP uses its own funds for stream restoration projects. The company only receives a small portion of its fee after obtaining all needed permits. The vast majority of the fee is only collected after construction is complete and the projects has performed as anticipated for five years.
From the article:
“If we don’t deliver a working project, I don’t get paid,” said Nick Dilks, one of EIP’s three managing partners. …
“It’s a large investment for the state,” acknowledged Gabe Cohee, director of restoration financing for the state Department of Natural Resources. But the “pay for success” arrangement with EIP made the commitment attractive.
“It reduced our risk,” he said. “It gave us more confidence because we were paying at the end of the project” instead of paying quarterly installments or at multiple milestones along the way. …
Cecil County chipped in a 10% match to the state grants for the Principio restoration, according to Kordell Wilen, the county’s development plans review chief. In doing so, the county got credit toward its Bay cleanup obligations at a bargain price.
The article indicated that scale of projects reduced the projected cost to $700 per pound of nitrogen reduction, as opposed to the $2,000 per pound for more typical stream restoration projects.
The four of the projects were largely paid with $12.5 million in grants from Maryland’s Chesapeake and Coastal Bays Trust Fund. The State Highway Administration is paying $23 million for the two remaining projects.
The article also discussed the role of the Cecil Land Trust in the EIP projects.