Natural Resource Investing Gets a Federal Jump-start

The Natural Resource Investment Center is making strides toward using market-based approaches and public-private partnerships to tackle natural resource and conservation issues.

For years, the nation slowly has been coming to terms with aging water infrastructure, dealing with water shortages in the West and attempting to revamp species and landscape conservation efforts.

This center is the newest actor coordinating large-scale private capital into a sphere that historically has been funded by the government.

To balance these issues against modern day urbanization pressures, population shifts, climate change and constrained budgets, Secretary of the Interior Sally Jewell launched the center in December.

The center was inspired by President Barack Obama’s infrastructure and economic growth-focused Build America Investment Initiative. It seeks to facilitate the formation of deals between stakeholders to attract private capital into natural resource and conservation investing.

The center emphasizes increasing investment in critical water infrastructure, facilitating water conservation and transference, and conserving species and habitat.

What does the center accomplish?

The vast mandate to pursue these goals was handed to Jeffrey Klein, hired as the center’s first executive director in March. He said he hopes to create pragmatic, economic solutions to the country’s natural-resources conundrum. Potential projects that target this mandate, mostly in the West, already are being created with multiple stakeholders across all levels of government and in the private sector.

Klein said the center’s "role is that of a catalyst and a convenor," not a funder supporting the resulting projects.

The traditional approach to financing water and conservation agendas through a regulatory regime in the form of government grants and loans needs to be revamped, Klein said: "In the future, economics need to drive where the financing comes from, because there is capital available in the private marketplace."

How are projects selected?

Because the center is new, almost all project details still are kept under wraps. Klein said he is largely selecting projects based on his 30 years of business leadership experience. He is assisted by Martin Doyle, senior conservation finance fellow; Thomas Iseman, deputy assistant secretary for water and science; and Jim Lyons, deputy assistant secretary of land and minerals management. Together, they use rigorous selection criteria for all projects and partnerships.

The center assesses the core business purpose of any proposed project to determine whether it aligns with the goals. They look for bona fide entities that have private sponsorship and have a proven track record of success.

Equally as important, Klein said, is whether a project is innovative, sizable and precedent-setting: "This is very important to the investor community." Managing these expectations is extremely necessary for securing private capital.

Read full article at: Green Biz