Pay for Success

Pay for Success
Partnering to restore streams
On a bright day last November, representatives of six groups (including the farmer) tramped along 9,000 linear feet of restored stream and 18 acres of stream buffer plantings funded by all six organizations. Songbirds erupted from shrubs, re-graded stream banks no longer had eroding undercuts, and clear water rolled around realigned stream bends.
 
This 5-million-dollar project, on Principio Creek crossing the Horst Family Dairy Farm, was completed in late 2017 and will significantly reduce the nutrients and erosion from legacy sediment entering the stream and thence the Chesapeake Bay.  The first of five proposed projects planned for Cecil County streams, this experimental business model is called Pay for Success. The Pay for Success model includes these key partners:
 

• Government entity: interested in providing a contract/grant for services
• Investors: provide operating capital for the project
• Intermediary: coordinates the project, selects & funds service providers
• Service providers: deliver services to a target stream
• Independent evaluator: validates the results of the project

 
In this case the governments are Maryland Department of Natural Resources (DNR) and Cecil County Government. Ecosystem Investment Partners (EIP) is the capital investment firm. The intermediary is non-profit Cecil Land Trust (CLT), who provides project management, landowner contacts, and long term stewardship after the five-year establishment period. The service provider is Wetland Studies and Solutions. DNR is the independent evaluator who inspects, quantifies, and certifies the pollution reductions.
 
This first project, on the Horst farm, offered a single front-funded bid to reduce nutrient and sediment levels from a privately owned portion of creek that was seriously eroding in every major rainfall event. The farmer could not afford the millions of dollars required to remedy this erosion but was happy to help fix the stream with this Pay for Success project.