Financing Soil Remediation

The report explores 17 case studies of financial instruments—including green bonds, social impact bonds, crowdfunding, and viability gap funds—to determine their applicability to soil remediation. It argues that while private capital is attracted to sites with high post-remediation land value capture, projects with lower commercial potential require public de-risking mechanisms, such as subsidies, guarantees, or performance-based returns, to become viable.

• Private investment in soil remediation is most feasible when there is a strong business case based on 'value capture in the increase in retail price of land' and stable revenue streams from commercial, residential, or industrial use after the cleanup is complete.
• For projects with low commercial value, such as rural or peri-urban sites, social impact bonds can be used because they do not rely on direct revenue streams but instead link investor returns to the achievement of 'predetermined social outcome' or performance benchmarks.
• Public funds can act as 'viability gap' funding to bridge the financial shortfall during the long remediation and incubation periods when projects do not generate revenue, thereby making them more creditworthy for private lenders.
• The 'polluter pays principle' can be operationalized through reserve funds, such as Belgium's BOFAS npo, which uses levies on the petroleum industry and fuel consumers to fund the remediation of petrol stations.
• Tax Increment Financing (TIF) and TIF bonds allow municipalities to fund remediation by earmarking the future increase in tax revenues resulting from the higher value of the redeveloped land.
• Fintech solutions, such as peer-to-peer (P2P) lending and crowdfunding platforms, can reduce transaction costs and democratize investment by allowing retail investors to fund small-scale or community-led remediation projects.
• Debt-for-nature swaps can be adapted as 'debt for remediation swaps' to help lower-income countries finance the cleanup of agricultural lands where private co-financing is not lucrative.
• Credit enhancement tools, such as political risk insurance and liquidity facilities provided by multilateral development banks, can raise the credit rating of a project above the sovereign rating of the host country, attracting international institutional investors.
• Blockchain-based 'social credits' could potentially mobilize international private capital by allowing investors to offset their tax liabilities in their home countries when the social impacts of a remediation project are verified.

APA

Perera, O., Wuennenberg, L., Uzsoki, D., & Cuéllar, A. (2018). Financing Soil Remediation. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/financing-soil-remediation.pdf

Chicago

Perera, Oshani, Laurin Wuennenberg, David Uzsoki, and Andrés Cuéllar. Financing Soil Remediation. International Institute for Sustainable Development, 2018. https://www.iisd.org/system/files/publications/financing-soil-remediation.pdf.

Wikipedia

{{cite report |last1=Perera |first1=Oshani |last2=Wuennenberg |first2=Laurin |last3=Uzsoki |first3=David |last4=Cuéllar |first4=Andrés |title=Financing Soil Remediation |publisher=International Institute for Sustainable Development |date=July 2018 |url=https://www.iisd.org/system/files/publications/financing-soil-remediation.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{perera2018financing, author = {Perera, Oshani and Wuennenberg, Laurin and Uzsoki, David and Cuéllar, Andrés}, title = {{Financing Soil Remediation}}, institution = {International Institute for Sustainable Development}, year = {2018}, month = jul, url = {https://www.iisd.org/system/files/publications/financing-soil-remediation.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }