About the Delaware River Watershed Revolving Fund
The Delaware River Watershed Revolving Fund (“Fund”) seeks to achieve watershed protection goals in the Delaware River Basin by providing interim financing for projects where available capital is insufficient at the time it is required. The $2.6 million pilot loan fund, which was capitalized with seed funding from the William Penn Foundation and is being administered by the Open Space Institute, is designed to help attract additional public and private funding to the region by providing interim financing for projects that protect and restore the watershed; expand and enhance the network of trails there; and increase and diversify the constituency for watershed protection.
Loan Size and Terms
The Fund will make simple-interest loans and financial guarantees generally of at least $100,000 and no more than $1 million at no more than 1.5% annual interest, for a term generally not to exceed 18 months. The Fund will seek to diversify its borrowers by organizational size and type and assist smaller borrowers through training and technical assistance.
Repayment
Repayment terms will be set in accordance with project needs. Generally, principal and interest will be paid at maturity.
Project Eligibility and Geography
The Fund will focus on projects and geographies that align tightly with existing strategies underway in the watershed, including:
- Forest protection and agricultural restoration in eight sub-watershed “clusters” within the Delaware River Watershed Initiative
- Reducing stormwater run-off through the installation of green infrastructure in Philadelphia and elsewhere
- Creation and enhancement of the Circuit Trail network
- Increasing and diversifying the constituency for watershed protection through support for capital projects in the 23 environmental education centers participating in the Alliance for Watershed Education network
Eligible Borrowers
Loan recipients must be non-profit organizations, local governments (counties and municipalities), or state or federally recognized tribes. Under special circumstances, the Fund will consider loans to for-profit organizations fulfilling charitable purposes. The Fund encourages partnerships between nonprofits and public agencies on projects that could secure loan financing.
Project Strategies
The Fund will focus on projects and geographies that align tightly with existing strategies underway in the Delaware River watershed, including:
- Forest protection and agricultural restoration in eight sub-watershed “clusters” within the Delaware River Watershed Initiative (DRWI);
- Reducing stormwater run-off through the installation of green infrastructure in Philadelphia and elsewhere;
- Creation and enhancement of the Circuit Trail network within the Delaware River watershed;
- Increasing and diversifying the constituency for watershed protection through support for capital projects in the 23 environmental education centers participating in the Alliance for Watershed Education network; or,
- Demonstrating innovation in use of new sources of funding, creative utilization of debt, new tools for land protection and stewardship, engagement of underserved communities.
Eligibility Guidelines
Project eligibility for each of the above strategies is defined below.
Forest Land Protection
Forest land protection projects must be located in one of the eight Delaware River watershed clusters. Preference is for projects within currently designated focus areas. Applicant should be a member of the DRWI cluster or be pre-approved by the William Penn Foundation.
Land protection projects must be: at least 75% forested (with a preference for more forest cover); have no upstream impacts that would significantly impair water quality at the project location; and must not result in reductions in natural cover or alterations in hydrology.
Agricultural Restoration and Stormwater
Agricultural restoration and stormwater projects must be located within, or primarily within, one of the eight DRWI watershed clusters. Preference is given to projects within currently designated DRWI focus areas. Projects must demonstrate significant measurable benefits to water quality through reduction of sediment and nutrient inputs to streams. Applicants should be a member of a DRWI cluster or be pre-approved by the William Penn Foundation.
Recreational Access Projects and Environmental Educations Centers
Eligible projects must contribute to recreational access or environmental education within the eight DRWI clusters. If applicable, applicants should show how trails, recreational access, or educational facilities connect to larger trail networks such as the Circuit Trail network in the Delaware River watershed. A detailed interactive map of the Circuit Trails can be found on the Delaware Valley Regional Planning Commission (DVRPC) website here.
Applicants may include nonprofit organizations, county, municipal and city agencies and departments, and consulting organizations. Applicant should be a member of a DRWI cluster or be pre-approved by the William Penn Foundation.
Eligible activities include project construction and right-of-way acquisition. Loan applications that include costs for planning and feasibility studies, design, and engineering studies, will be considered on a case-by-case basis.
Proposed project activities may be undertaken by organization staff, a design or engineering
consultant, a construction contractor or some combination of the above as appropriate. Projects should adhere to the local standards and those of any applicable project funding sources.
If considering applying for a loan for an Environmental Education Center, please contact program administrator Bill Rawlyk at [email protected] for additional guidance prior to making an application.
Innovation Projects
The Innovation Projects category is designed to allow applicants to pilot and demonstrate new tools and practices that could eventually become incorporated into the DRWI. While innovation projects should generally fall within the above strategies, this option can allow for more flexibility if your project does not strictly meet eligibility requirements outlined above. Prior to making an application applicants should contact Bill Rawlyk at [email protected] to determine the applicable strategy and eligibility.
In addition to answering proposal questions for the applicable project strategy, applicants for Innovation Projects must complete additional questions in section D of the application.
Examples of projects eligible for Innovation loans would include those that address the following:
- Access to new sources of funding including from public and or private sources;
- Pilot an organization’s use of debt, or its creative utilization;
- Demonstrate new tools or practices, e.g., utilizing innovative easements, meshing land protection and restoration, piloting creative approach to stewardship;
- Engage and/or benefit underserved communities; or,
- A project that may be lost without interim financing.
Innovation Projects must still meet the following conditions:
- Be located in one of the eight DRWI clusters; preference is given to projects within currently designated focus areas;
- Land protection projects must be: at least 75% forested (with a preference for more forest cover); have no upstream impacts that would significantly impair water quality at the project location; and must not result in reductions in natural cover or alterations in hydrology;
- Other project types, (e.g., restoration, stormwater, recreational access or environmental education) must demonstrate significant measurable benefits to water quality through reduction of sediment and nutrient inputs to streams and/or demonstrate educational benefit; and,
- Applicant should be a member of the DRWI cluster or be pre-approved by the William Penn Foundation.
Leverage
While the Fund seeks to leverage its funds with other sources and limit, where appropriate, its exposure in any one transaction, bridge financing may require coverage of full transaction amounts in some cases. Depending on the project size and borrower need, financing of up to 100% of appraised value will be considered.
Security
The Fund will generally make loans secured by the borrowing organization’s balance sheet. However, depending on the project and organization, other forms of security, including financial assets (including marketable securities or secured personal guarantees) and only under exceptional circumstances, recourse to real estate (first mortgage) at its conservation value, may be sought. To facilitate borrowing by smaller organizations, the Fund can tap a small loan loss reserve to help collateralize riskier loans.
Approval Process
OSI is establishing an Advisory Committee consisting of subject matter experts in the Foundation’s watershed program strategies, as well as an ex-officio representative of the William Penn Foundation, to review loan requests. The committee will review programmatic elements of all loans and recommend them to OSI staff for financial analysis and approval by its board of trustees.