Innovative Financing for Abandoned Mine Land Reclamation

Resources and Recommendations


Figure 1.  Pink regions on the map indicate Eastern U.S. Opportunity Zones.

Opportunity Zones present a unique opportunity for small communities, including those in Central Appalachia that have historically relied on coal, to seek new capital for economic revitalization projects. As provided by the White House Opportunity and Revitalization Council, “Opportunity Zones are economically distressed communities, defined by individual census tract, nominated by America’s governors, and certified by the U.S. Secretary of the Treasury via his delegation of that authority to the Internal Revenue Service. Under certain conditions, new investments in Opportunity Zones may be eligible for preferential tax treatment.” Due to the tax incentives, OZ’s push investors to put their money where it is most needed, looking past traditional markets and funneling new capital to in-need economies. However, the OZ-designated communities must plan and prepare to match the right investors who prioritize community needs and maximize their investments’ impacts. Relevant planning resources for OZ communities are provided below. The above map, also linked here, is the best method to determine if you live or work in an OZ. 

The Reclaiming Appalachia Coalition operates in Central Appalachia, an area that has seen economic distress since the coal industry’s decline. Many coal impacted communities have since been designated OZs. One way these communities can prepare for OZ investments is by creating a community OZ fund for coalfield reclamation projects. To receive tax benefits, OZ investors must make long-term investments. In this sense, the fund then has more time to put the capital to good use—this is well-suited to projects with longer lifespans and that require a significant workforce. 

Most contemporary OZ deals focus on real estate transactions, leading some observers to question if the OZ program is living up to its mission to bring transformative investment to communities. Certain projects or aspects of a project may generate low or no monetary return on investment; however, they provide other valuable outputs that have intrinsic or secondary value. Remediation efforts are one such example where the result from an investment may be clean water or other “ecosystem services.” For example, reforestation projects, carbon credits, and revenue from sustainable timber harvest could yield cash value.  

Toolkits for Local Leaders 

  • Planning for Economic Development Within Opportunity Zones (September 2019) is a roadmap to help communities plan for potential investments in OZs by understanding local needs; aligning community assets; establishing regulatory tools and financing incentives to support investments; and forming partnerships for equitable and inclusive community development. 
  • A Guide to Local Best Practices and Case Studies ( May 2020): a toolkit that provides more detailed information and illustrative examples to guide local leaders as they develop strategic plans for OZs. 
  • The Opportunity Zone Fund Directory from the National Council of State Housing Agencies (NCSHA) is a compilation of publicly-announced funds formed to attract investment in OZs. 

Virginia Resource

Appalachia Resource

  • Appalachian Community Capital: Opportunity Appalachia targets 158 OZs in Central Appalachian coal-impacted communities in WV, OH and VA. The organization offers technical support to develop community strategies and outreach to investors. 


According to the advocacy organization PACE Nation, “PACE pays for 100% of the hard and soft costs of completing an energy efficiency, renewable energy, or resiliency project. PACE is repaid on the property tax bill over a period of up to 30 years, enabling longer payback periods that can be cash flow positive from day one.” Plans for clean energy development on AML or post-law sites that involve remediation can still qualify for this type of funding, and the capital can help cover cleanup costs necessary for the development. 

To access PACE financing, states must approve PACE legislation, and then localities must enact PACE ordinances for residents to access the financing. Virginia has approved PACE legislation, but ordinances have not been passed across the commonwealth. Any community interested in PACE financing for clean energy projects must gather widespread support for passing PACE ordinances. This can be through letters from stakeholders such as: developers, property owners, and contractors. The Mid-Atlantic Pace Alliance (MAPA) offers a Commercial-PACE Toolkit on its website to help prepare your community for PACE ordinances. 

Virginia Resources

  • VA Model Ordinance: a model for the ordinance by which the locality authorizes a program to provide PACE loans.
  • Virginia Energy Efficiency Council (VAEEC): Through C-PACE in VA, the VAEEC tracks localities that have passed PACE ordinances and PACE projects.
    • VAEEC GIS Maps display C-PACE eligible properties in Virginia.


Impact investors supply capital to organizations and projects that produce positive outcomes within their communities. The Reclaiming Appalachia Coalition’s sustainable projects within coal-impacted communities have the potential of attracting socially and environmentally concerned, as well as place-based impact investors. Impact investments could play a significant role in project finance as the coalition explores non-grant funding sources for both cleanup and redevelopment initiatives. While impact investing presents promising opportunities for the RAC’s future projects, utilizing this form of financing requires specific internal capacities to manage the investment; this role could be played in-house or via partnerships with investment-oriented organizations. RAC member Rural Action is well-positioned for impact investing; Rural Action started several social enterprises and has a director focused on engaging in revenue-generating projects and promoting an entrepreneurial mindset. Rural Action has successfully attracted investors to innovative projects such as the social enterprise that they launched, True Pigments, which will reclaim seven miles of stream in Millfield at the site of the largest acid mine drainage (AMD) discharge in Ohio using a biochemical process that removes iron oxide from the water. The result is clean water flowing back into the creek, and iron oxide pigments that are converted into paint and sold to pay for the stream restoration. 

Renewable energy is on the rise in the United States and is a promising avenue for sustainably uplifting Appalachia’s economy. Impact investing experts representing The Nature Conservancy and Invest Appalachia have emphasized the potential of solar power stations on coal impacted land to attract investors. RAC organizations can play supporting roles in working with local landowners, localities, and stakeholders during the pre-development phase of solar installations on former mine land. In some cases, solar developers already have financing sources for their development. However, connecting impact investments to these projects could bring added value, particularly in cases where development challenges—such as steep terrain and policy barriers—slow down the return on investment and increase the projects’ risk. Ideally, the cash value of the return from the energy production could be paired with other cash or non-cash based ecological returns through environmental remediation that happens concurrently with the development of the solar asset.

At minimum potential investors will request detailed project cash flow models, including information such as:

  • Project Description/Industry/Location
  • Past Performance
  • Market Research and Marketing Strategies
  • Business Technical Operations Management
  • Project Financing
  • Project Timetable
  • Exit Plan


  • Invest Appalachia

Invest Appalachia is establishing a model to support organizations, such as those within the Reclaiming Appalachia Coalition, through their pool of catalytic capital and impact investing dollars. Interested organizations must convey a clear message related to their impact and where additional funding is needed. Invest Appalachia’s strategy is to provide grants or financing to accelerate other investments within the Appalachian region. Invest Appalachia’s priority sectors include clean energy, creative placemaking, community health, and food and agriculture. There is a significant overlap between Invest Appalachia’s and RAC members’ concerns. Invest Appalachia is in the startup phase and is currently raising capital.

  • Blueprint Local

Blueprint Local is building a fund based in Roanoke, Virginia. The portfolio will target Opportunity Zones and place-based investments. They prioritize developments within economically depressed communities, such as Appalachia’s coal impacted communities, and could be a valuable resource for RAC members.

  • The Nature Concervancy’s NatureVest

The Nature Conservancy’s conservation impact investing unit, NatureVest, aims to invest a $1 billion pool of capital in conservation efforts by 2021. The Nature Conservancy has already invested a significant amount within Appalachia. They recently launched the Cumberland Forest Project, a large-scale forest conservation project in Southwest Virginia and along the Kentucky and Tennessee borders. Impact investors funded the purchase. TNC plans to produce a small return from sustainable timber harvesting projects, carbon offset projects, recreational leasing programs, and they are considering reclaiming coal-impacted land for solar power development. However, the majority of the return will come from selling the property with an environmentally focused contract. RAC members could collaborate with TNC to facilitate solar development within their Appalachia-based land, such as the Cumberland Forest. 


LOCUS offers consulting services for place-based foundations, donor-advised funds, and high net worth individuals interested in impact investing. They serve as a resource for connecting the previously mentioned sources of capital with investment opportunities. LOCUS has worked in Appalachia and would be an excellent consulting resource if RAC members decide to further consider impact investing.


Leveraging impact investments or implementing a private equity model may require significant restructuring, investment, and human resources, which may not be practical for all organizations working on land restoration projects. NatureVest’s Deputy Managing Director of Forest Investing, Thomas Hodgman, recommends exploring loans as a potential funding source for nonprofits. Similar to investors, loans require repayment, but do not require as much capacity as impact investing. Therefore, low-interest loans are a viable form of funding for revenue-generating projects on coal impacted land. Additionally, partnerships with qualified and accredited entities, such as Community Development Financial Institutes (CDFIs), could be a desirable way to bring impact investments to redevelopment projects without placing an additional burden on nonprofits or localities.



Green bonds are an alternative funding source that, similar to loans, requires full repayment at a low interest rate. In contrast, green bonds are financed by environmentally concerned investors, making them a relevant and appropriate funding source for reclamation projects on coal impacted lands. In short, green bonds are fixed-income “financial instruments” funded by investors passionate about environmental justice and the climate. In the past, they have been used to support sustainable, energy-efficient, and conservation-related projects. In return for purchasing green bonds, investors receive tax incentives (exemptions and credits), making them more appealing than other bonds. 

The World Bank has issued green bonds to finance: renewable energy and energy efficiency projects; water, wastewater, and solid waste management projects; agriculture, land use, forests, ecological resources, resilient infrastructure, and built environment projects; clean transportation projects.  

Highly Ranked Green Bond Issuers



  1. Reforestation or the reclamation and cleanup of coal-impacted land may result in portions of the land being registered as ecological assets. Coal impacted land cleanup, and reforestation increases the lands’ value, and registering the lands’ ecological assets can generate revenue through environmental mitigation credit sales. 
  2. Incentivize landowners with AML features on their land to generate revenue by cleaning contaminated areas and then registering their ecological assets. 

Ecological assets are a potential source of revenue from mine land remediation. These assets involve tapping into the environmental marketplace, which attaches a monetary value to reforestation and reclamation. Organizations and businesses that are looking to offset pollution to meet government restrictions will often purchase ecological assets. Meanwhile, organizations with extra clean operations or mitigation projects can register credits through a certified registry to generate revenue. While environmental credits are a feasible way to produce income from AML cleanup, profits from credits alone do not tend to cover the land’s cost. Instead, they are a means to clean up and conserve land, which can then be sold at a higher price under strict environmental regulations. Selling the land to environmentally aware clients who will respect its ecological assets and conservation will cover the costs incurred from purchasing the property.

Carbon Credits

Landowners can lease or sell reforested abandoned mine land to companies seeking credits. A carbon credit market already exists, and these credits will continue to remain in demand as long as government carbon emission restrictions remain and demand will grow as restrictions increase.

California Cap-and-Trade is among the most extensive carbon offset programs. California’s revenue from Cap-and-Trade is distributed to agencies to implement greenhouse gas reducing initiatives. From 2013 to 2017, there was a 3% reduction in California’s carbon emissions. A cap-and-trade model could be adopted in Appalachia.

The American Carbon Registry (ACR) is a nonprofit, voluntary greenhouse gas registry. California Cap-and-Trade endorses the ACR. ACR’s voluntary market monitors carbon offset projects to affirm their validity. ACR, in collaboration with APX, runs an online offset registry. Offset purchases are exchanged directly between the seller and buyer, and then documented within the digital registry. ACR is open to collaborations with organizations, such as those within the RAC. 

Water & Habitat Credits

The Clean Water Act called for permits to be issued against waste disposal into navigable waters and wetlands. Permittees must compensate for any pollution through mitigation efforts (i.e., buying wetland mitigation credits). Mine land reclamation initiatives may register for stream mitigation credits if they restore streams impacted by acid mine drainage.


The Nature Conservancy and Bluesource, an organization focused on reducing emissions and promoting and supporting sustainable initiatives, collaborated to incentivize landowners to reclaim AML features. To motivate sustainable private conservation, both organizations helped landowners to implement offset projects. This initiative was based in Pennsylvania but could be adapted to other Appalachian states. Through TNC’s Working Woodlands program, forest management plans, approved by the Forest Stewardship Council (FSC), were developed for private-owned forests of at least 250 acres. Bluesource financed and facilitated carbon credit sales on such private-owned land. This collaboration incentivized private landowners to engage in sustainable conservation and potentially clean up AML features. RAC members could replicate TNC and Blusourse’s initiative.