There is a pressing need to increase the pace and scale of wildfire mitigation and climate resilience projects in our communities and landscapes. Organizations that are funded through state and federal grants are hindered by up-front project costs (equipment, staff time, and contractors) and long wait times (30-90+ days) between grant reimbursements. This results in a perpetual cycle of cash-in-reserve challenges for these organizations and creates a significant barrier to conservation outcomes.

Below-market-rate bridge financing can fix this bottleneck. COCO already provides bridge financing, fiscal hosting, and access to conservation expertise to multiple organizations through our affiliate program. However, more organizations need access to more stable funding to implement projects that address pressing resilience needs successfully.

The Renewal Fund will accelerate projects by supplying bridge capital to groups at critical stages of project planning, development, and implementation. To achieve this, COCO will raise a minimum of $1 million to capitalize the Revolving Fund pilot in Colorado, plus additional funding to design, manage, and refine the loan platform and governance to support the national rollout of the full fund. Capital for the revolving fund is being raised through a mix of private foundation program-related investments (PRIs) and grants. 

The design of this Renewal Fund pilot is informed by an in-depth market analysis and feasibility study. The analysis included consideration of program design trade-offs, the development and testing of a financial model, semi-structured interviews with those developing similar conservation finance tools, a national survey of potential borrowers, and the development of an eligibility screener. Conservation finance expertise was contracted through CK Blueshift and Culp & Kelly, LLP. 

The feasibility study analyzed existing conservation revolving loan programs such as The Clean Water State Revolving Fund, Water Infrastructure Finance and Innovation Act, and Forest Resilience Bonds. No programs were found that directly support place-based, small to medium-sized watershed/forestry coalitions/collaboratives or tribal organizations. However, the projects that these groups implement aggregate a sizable impact on wildfire and ecosystem resilience.

The national survey was conducted to determine the scope and scale of bridge financing needs among potential Renewal Fund borrowers. The survey assessed interest in borrowing from the fund, program design preferences, and perceived barriers to entry. The survey revealed strong support – and excitement – for COCO’s Revolving Fund with 63% of respondents expressing interest in borrowing. On average, participants expressed interest in borrowing $146,582, with a median loan request of $100,000. The average preferred loan duration was 1.89 years, while the median was 2 years. 70% of respondents requested an interest rate below 3%, and 33% indicated their willingness to pay between 3% and 4.99%.

While today’s funding environment has introduced new volatility, we have built our approach with safeguards that prioritize resilience and downside protection. Experience from a $250 million conservation bridge loan fund that is now closed showed that over 90% of its 400 loans had repayment guaranteed by public sources. About 30% required small adjustments, such as extensions. The average loan term was 18–24 months, with most loans repaid in 9–12 months, and only one default. Drawing on these lessons and our research about current market conditions, we will apply rigorous screening of repayment sources and conservative loan structuring to ensure our portfolio remains stable even as conditions evolve.