Investing in forests, protecting communities

The Forest Resilience Bond (FRB) is a public–private partnership that finances forest restoration in places where unhealthy forests put communities, water supplies and wildlife at risk. It turns the long-term benefits of healthier forests – such as fewer catastrophic fires and more reliable water – into a practical way to share costs among agencies, utilities, and other local partners.

The FRB offers a new way to pay for forest restoration by bringing together community partners, public agencies, and private investors so critical work can happen sooner. Instead of waiting years for limited public funding, investors provide upfront capital for activities that reduce wildfire risk and protect water resources, and are repaid over time by the organizations that benefit.

Many forests in the western United States are overcrowded and at high risk of severe wildfires, which can damage homes, drinking water sources, and recreation areas. Restoration work, such as thinning overgrown trees, using prescribed fire, removing invasive species, and planting native vegetation, helps create healthier, more resilient forests and safer communities.

Blue Forest, the nonprofit that created the FRB, works with partners such as the USDA Forest Service, local governments, utilities, Indigenous communities and other nonprofits to design projects that respond to local needs. Once the project scope and expected benefits are defined, investors – including foundations and institutional asset managers – provide the upfront capital so restoration crews can begin work immediately, while beneficiaries agree to repay investors over time.

Success Story: Yuba I Forest Resilience Bond

In California’s North Yuba River watershed, Calvert Impact Capital – Praxis’ community investing partner – provided a $1 million loan to the Yuba I FRB, supporting restoration across 15,000 acres of forest. By 2023, the project had restored 2,675 acres of ecosystems, enhanced 27,601 acre-feet of source water supply, sustained 72 jobs, and fully repaid investors, all while helping reduce wildfire risk for nearby communities and recreation users.

The success of Yuba I helped Blue Forest demonstrate that the FRB model works at scale and can attract additional partners and capital. Building on that foundation, Blue Forest and its partners have launched larger efforts, including the $25 million Yuba II FRB – a facility expected to finance at least $50 million in additional restoration – as well as new bonds in regions such as Rogue Valley, Southern Oregon-Northeastern California, Upper Wenatchee, and Upper Mokelumne.

The Praxis Commitment

Praxis Investment Management supports organizations through investments in Calvert Impact, an impact-investing institution that advances community development financing around the world. This support reflects the Praxis commitment to allocate approximately 1% of each fund to benefit neighborhoods and individuals through community development investments.