A Conversation with Spencer Meyer
In June 2020, The Conservation Fund purchased more than 15,000 acres of forest in Maine from the Chadbourne family–a major development in conservation finance. Over the next five years, the Fund will manage the property, harvest timber, and work with conservation partners to ensure most of the land will be sold to conservation organizations who will permanently protect and steward the lands. Highstead Senior Conservationist, Spencer Meyer, who specializes in conservation finance, explains how this groundbreaking land deal happened and its implications for the Sebago watershed.
What makes this acquisition interesting from a conservation finance perspective?
This land purchase by The Conservation Fund was financed from the proceeds of an innovative Green Bond. Like regular bonds that companies or governments use, this one raised money from investors to fund much-needed infrastructure projects. Green bonds are used specifically to finance green infrastructure projects that have tangible positive environmental or climate benefits.
How did The Conservation Fund use Green Bonds in Maine?
In 2019, The Conservation Fund (the Fund) offered to investors 10-year green bonds totaling $150 million. Proceeds from the bonds are intended to increase the pace and scale of the Fund’s “Working Forest Fund.” The Working Forest Fund is dedicated to mitigating climate change, strengthening rural economies and protecting natural ecosystems through the permanent conservation of at-risk working forests. In this case, The Conservation Fund used the bond funds to purchase the Chadbourne property. This property will eventually be sold to various conservation organizations, at which point the Fund will repay their investors and then do it all over again on the next piece of important forestland.
Is the land permanently conserved now?
Not yet. The Conservation Fund model works because it can act quickly to take large properties with important conservation attributes off the open market before they can be sold to developers or timber speculators. So, for now, the land is owned and managed by the Conservation Fund. The Fund works with land trusts, local communities and state and federal agencies to come up with a plan to transition the property, often in several components to different long-term conservation owners.
Who will The Conservation Fund sell the property to?
The Conservation fund will prioritize the sale of the land to conservation buyers who are interested in different aspects of part of the land and who intend to protect the land in perpetuity. At the same time, the Fund has an obligation to bondholders to provide a return on the investment, which comes from sustainably harvested forest products and the sale of the property.
What are the next steps for conservation organizations interested in purchasing property for protection?
The Chadbourne property is made up of many individual parcels, each with its own conservation values and community benefits. The Fund and their partners, including Sebago Clean Waters (of which Highstead is a significant partner) are now working together to offload each parcel to the most appropriate long-term owner. These land trusts and conservation NGOs are actively working to fund raise from private donors, state and federal grant programs, and others to purchase the land from The Conservation Fund.
What type of efforts are underway to purchase the land for conservation?
One of these effort involves nearly 3,000 acres in the Sebago Lake watershed. With approximately 3,000 acres of the Chadbourne Tree Farm located within the Sebago Lake watershed, this effort will account for nearly 10% of SCW’s 35,000-acre forestland conservation goal. Over the next l few years, the Conservation Fund will manage the white pine timberland, located primarily in Oxford County, providing time for Western Foothills Land Trust and Sebago Clean Waters to raise the funding needed to permanently conserve these tracts of forest.
How is Sebago Clean Waters going to find the funding for the purchase?
I’ve been working very closely with my partners in the Sebago Clean Waters (SCW) initiative to prepare for an opportunity like this. Sebago Clean Waters is a partnership of nine conservation organizations, including the Portland Water District, working to protect water quality, community well-being, a vibrant economy, and fish and wildlife habitat in the Sebago region through voluntary forestland conservation. We have actively been developing the concept of a water fund to be able to combine investments from various sources, including the Portland business community, to be able to conserve land at scale when opportunities arise like this one afforded by The Conservation Fund.
What is the significance of the Sebago Lake watershed?
The Sebago Lake watershed is the drinking water source for more than 200,000 residents in the City of Portland and surrounding communities (1/5th of all Mainers) and is just one of about 50 drinking water supplies in the country that does not require filtration before final treatment. The growth of the Portland area and new demands for development have begun to put pressure on the forests in the Sebago Lake watershed, putting the watershed at risk for fragmentation and loss of habitat. Sebago Clean Waters is working with private landowners, community and business leaders, and state and federal agencies to conserve this vital green infrastructure resource. Not only are there environmental benefits, but it will also offers local economic, health and recreation benefits for residents and visitors alike.
Is this model likely to be used elsewhere in New England?
Land Trusts throughout New England, and throughout the country, are increasingly looking for new ways to finance their conservation initiatives. At the same time, so-called impact investors are looking to invest some of their portfolio in projects that can have positive environmental, climate and social impacts. We believe our Sebago Clean Waters approach, including partnering with The Conservation Fund to use the proceeds of their green bonds, is a viable strategy. We hope it will bring in more funding partners to permanently protect land that can improve air and water quality, provide economic opportunity and jobs and contribute to healthier more livable communities. We think there are other conservation partnerships, especially within the Regional Conservation Partnership Network who will benefit from the Sebago Clean Waters model. And at Highstead, like we are doing with Sebago Clean Waters, we will to continue to experiment with our partners on new approaches to pay for conserving the forests and farms on which we all rely in our lives.