New green infrastructure investment model receives $1.7 million in funding

Prudential Financial is investing $1.7 million in a pilot collaboration between The Nature Conservancy (Arlington, Va.) and asset management firm Encourage Capital (New York) to prevent millions of gallons of stormwater runoff originating in Washington D.C. from the entering the Anacostia and Potomac rivers.

The venture, called District Stormwater LLC, is based on a new investment model driven by credit swapping. The funding will be used to finance green infrastructure projects on properties in the District of Columbia. Types of projects will include permeable pavement, green roofs, and rain gardens, which will generate stormwater retention credits under the district’s new Stormwater Credit Trading Program. These credits then can be purchased on the open market by more land-constrained developers who may need the credits to meet their mandated stormwater retention requirements.

Lata Reddy, vice president of corporate social responsibility at Prudential and president of The Prudential Foundation, said the new approach represents a model for addressing similar issues nationally. “This investment is a great example of how public policy can encourage private investments to solve urban challenges and the critical role that impact investments can play in catalyzing new markets,” she said.

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