Washington, D.C. rests on the banks of two rivers – the Potomac and the Anacostia – that flow into the Chesapeake Bay. Like many cities across the United States, DC has a combined sewer system that mixes stormwater runoff with household sewage. When storms overwhelm the treatment facility, the combined sewage overflow (CSO) drains waters high in Nitrogen, Phosphate, and Sediment into the rivers, reducing aquatic life and making waterways unsafe for fishing and recreational purposes. With other signs of an improving Potomac River and Chesapeake Bay, stormwater runoff is the only growing pollutanti.
The DC Clean Rivers Project includes the world’s first Environmental Impact Bond (EIB) to reduce stormwater runoff and combined sewage overflows. Through green infrastructure, water is retained on land through natural processes. As George Hawkins, former CEO of DC Water, said, “…instead of [rainwater] being a problem that we channel into a pipe and get rid of, we’re holding it into the ground and acting as what water is, an asset”. Highly scalable and replicable, a pay for success EIB can be used to spread the performance risk associated with green infrastructure to impact investors, allowing for greater adoption of green infrastructure and meeting desired outcomes of the project.