September 16, 2024

By Gerelyn Terzo, Global AgInvesting Media

Blue Forest, a conversation finance non-profit dedicated to forest restoration, has captured the attention and capital of financial institutions of late. Earlier this month, the organization received a $25 million capital injection from California’s Infrastructure and Economic Development Bank’s (IBank’s) Climate Catalyst Revolving Loan Fund. The funds, which technically take a form of a loan, are designated for the non-profit’s California Wildfire Innovation Fund, an investment vehicle whose strategy is to combat wildfire risk. While the capital is directed into the fund as a loan that must be repaid, the partnership is structured so that Blue Forest has the flexibility to use the proceeds for other investments.

IBank’s financing marks the first investment from the entity’s climate catalyst fund. The funds will help Blue Forest in its efforts to reduce wildfire risk by restoring California forests, improving forest health and implementing new biomass technologies. IBank’s fund, which was launched to provide flexible, low-cost credit to public and private sector applicants, joins the Golden State’s CSAA Insurance Group, which made a $25 million investment into Blue Forest early last year.

Among the initiatives that Blue Forest supports since CSAA Insurance Group’s investment includes a $14.5 million heartwood biomass facility in Tuolumne County, California, that converts potential wildfire fuel such as forest restoration byproducts into firewood bundles, wood chips and ag posts.

Blue Forest published a LinkedIn post stating, “Blue Forest is excited to partner with IBank California alongside CSAA Insurance Group, a AAA Insurer, in a first-of-its-kind coalition of non-profit, public sector and insurance industry organizations to invest in forest restoration and economic revitalization efforts for local communities across the state.”

IBank Deputy Director for Climate Finance Dan Adler stated, “The message from California’s policy leadership in addressing the wildfire crisis is clear: governments at every level must do more, faster, and at a sustained pace, and we need partnerships with the private sector. The same is true for climate solutions across the board – governments can help create markets that the private sector can invest in, and provide strategic capital to help those markets grow. Our new partnership with Blue Forest and CSAA is a perfect example of these principles, and a great example of what our Climate Catalyst Fund is intended to achieve.”

The U.S. wildfire season has been notable this year, and it’s not over yet. For example, California’s Park Fire located in Butte and Tehama counties, which was sparked in July, charred roughly 170,000 hectares (420,079 acres) before becoming mostly contained a month later. After spreading fast and furiously, it ranked among the four-biggest wildfires in the state’s history and the biggest of 2024.

Meanwhile, as of early August, the state of Oregon lost over 1.4 million acres, owing to massive wildfires that have gripped the Pacific Northwest this year. Several of this year’s biggest wildfires are likely to persist into the fall, failing to become fully extinguished until a significant rain event or the first snowfall of the year.

IBank Executive Director Scott Wu stated, “Catastrophic wildfires are one of the most devastating manifestations of climate change in California. We are excited to announce this Climate Catalyst Fund commitment, providing the public investment needed to accelerate projects and promote innovation in wildfire threat reduction, while building key partnerships with private capital to promote the state’s goals.”

CSAA’s Chief Risk Officer Jeff Huebner said, “When we launched the California Wildfire Innovation Fund, our primary goal was to protect California communities and AAA members from wildfire by improving forest resiliency. We hoped that our efforts would attract like-minded investors and are thrilled that IBank’s matching $25M contribution will greatly magnify the fund’s ability to deliver key environmental, social and financial benefits for all.”

Separately, QBE North America, a global insurance provider, has bolstered its support of Blue Forest since its first investment in the non-profit in 2022. Through the QBE Possibilities Fund, the insurer has most recently committed to matching up to $200,000 from any public or employee philanthropic impact investment to Blue Forest’s FRB Catalyst Facility, a pooled investment vehicle designed to accelerate financing across forest resilient bond (FRB) projects. FRB is Blue Forest’s public-private partnership that harnesses private capital to support cash flow while attracting fresh capital to the forest restoration segment.

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