DENVER — CH2M HILL, a global full-service consulting, design, construction and operations firm, has joined forces with EKO Asset Management Partners, a specialized investment and advisory firm, to form a new partnership aimed at developing and implementing infrastructure projects that create positive environmental impact and unlock new types of investment capital.
The new venture, called Green Path Partners, seeks to harness the power of innovative finance, natural systems, and creative design to deliver more adaptive and resilient infrastructure with a variety of long-term benefits to communities and the environment.
A global infrastructure revolution is taking place, leaders from both companies agree. In developed countries, governments are dealing with upgrading and replacing aging infrastructure, while in the rapidly developing countries of Asia, Latin America, and Africa there is a need to design and build new infrastructure for growing populations and growing economies. In both cases, the needs far outweigh available funding. Traditional sources of infrastructure finance are either tapped out, the leaders note, or else cannot keep pace with the new scale and scope of infrastructure growth. As a result, there is increasing demand for innovative “green” solutions that not only address traditional infrastructure needs but also provide environmental, economic and social benefits to local communities.
On April 23, CH2M HILL’s Matt McGowan, senior vice president of corporate development, and Jason Scott, EKO’s co-founder and managing partner, announced the formation of Green Path Partners, which offers a unique funding and delivery model to help address the world’s burgeoning infrastructure needs, while simultaneously creating positive social, economic, and ecological outcomes. The announcement came in conjunction with a gathering of family office and institutional investors looking at environmental investment opportunities convened by EKO and Sonen Capital at JP Morgan Chase in New York City.
“There is a huge need in the marketplace to make the link between the aspiration for new kinds of green infrastructure solutions, and the delivery of that vision via appropriate and effective financing,” says Elisa M. Speranza, president of CH2M HILL’s Operations Management Business Group and the firm’s executive sponsor for sustainability. “Green Path Partners combines EKO’s track record of innovative finance as well as its access to investors, policy makers, and other key stakeholders together with CH2M HILL’s expertise in project delivery, engineering, risk management, and sustainability. In so doing, Green Path Partners is able to close the gap between building and designing infrastructure that is resilient, adaptive, and sustainable, and delivering measurable environmental and social benefits to communities worldwide.”
“Institutional investors from foundations, family offices, pensions, and endowments are increasingly interested in opportunities to support natural infrastructure as a way to deliver both public and private projects,” adds EKO’s Scott. “Some are particularly committed to identifying investments that achieve economic, environmental and social outcomes, and they are often willing to invest in innovate strategies and structures in order to achieve them. CH2M HILL’s demonstrated ability to deliver infrastructure projects will encourage investors that Green Path Partners can deliver these outcomes.”
Green Path Partners will target projects that:
• utilize natural infrastructure or offer an opportunity to integrate natural infrastructure into a traditional infrastructure approach;
• provide a positive ecological impact with significant and demonstrable social and economic outcomes; and
• afford an opportunity to use innovative financial structures, non-traditional impact investment capital, or both.
GPP intends to work with clients to identify potential projects that meet these criteria; help them secure investor funding or alternative financing that will pay for the project; and help identify revenue sources that can be used to repay investors or creditors, similar to traditional funding through a municipal bond issue. For example, a series of green stormwater retrofit projects could be funded via innovative financing for stormwater management services.
The project itself could then be delivered on a “pay-for-performance” basis by private companies, raising private capital, and using environmental approaches — bioswales, permeable pavement, rain gardens, etc. — to deliver the services, Scott says. In this way, private actors take the risk of financing the infrastructure development and only are paid by government if and when the infrastructure is built and delivers the desired services. GPP’s resources will be particularly attractive to clients who are up against the limits of their traditional borrowing capacity due to commitments to other priorities.
Once the funding component is addressed, Green Path Partners is able to work with clients to plan, design, and implement the project — either directly or on a consulting basis — or carry out individual project components based on the clients’ specific needs.
“We are very excited about the potential that Green Path Partners offers to provide a much-needed alternative financing and delivery mechanism for government leaders around the world,” added Speranza. “Not only does this new partnership help address the aging, failing infrastructure in the U.S. and elsewhere, but it does so while achieving positive social and environmental benefits.”