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Green loan
Green Loan is a type of financing that enables farmers to use the proceeds for projects contributing to the environment. For investors, Green Loans give an opportunity to indirectly contribute to the generation of high-quality soil carbon credits, which are later sold on the Voluntary Carbon Market and receive part of the proceeds from their sale.
-4,293,331 kg CO2e
LT0001004
| Project owner | Address |
|---|---|
| header_1 | Declared | Owned |
|---|---|---|
| Dirbama žemė | 327.41 ha | 86.00 ha |
| 2021 | 2020 | |
|---|---|---|
| Revenue | 318,630.00 € | 270,003.00 € |
| Net profit | 53,678.00 € | 57,120.00 € |
| Equity ratio | 32.91% | - |
Documents
Payment schedule
We are happy to announce the pilot zero-interest Green Loan to provide investors with an opportunity to contribute to climate change mitigation and enhance agriculture transformation from polluting to CO2 removal.
As you may already noticed, the loan has an initial zero-interest return yet exposes investors to the benefits (and potential turbulences) of a rapidly growing Carbon Credit market.
These loans will be issued to farmers with a zero per cent interest rate. However, by adopting sustainable practices, emission reduction will occur, which later will be verified and traded as carbon credits on the international market. Therefore, the interest is attached to the price of carbon credits.
1 tonne of CO2 removed equals 1 Carbon Credit and currently, one carbon credit is worth around 20 EUR. Farmers can generate 2-3 credits per hectare of no-till arable land.
Consequently, the farmer will make repayments of a principal amount according to repayment schedules, but the interest will be repaid once a loan reaches at least 2 years in maturity.
You can read more about it here
Let’s dive deeper into the farmer’s business.
Amount of land generating carbon credits: 134,17 hectares
The project owner started the development of his farm in 2010, but he actively started farming in 2017 and since then he expanded his farm’s arable land to almost 330 hectares. The farmer’s wife also owns agricultural land, therefore the total area of the family farm is up to 350 hectares. The farmer employs one permanent employee and additional employees during the season.
The businessman applies a no-till farming approach on his farm where the majority of the farm area is sown with wheat, as well as barley and rapeseed. The businessman has three tractors, a combine harvester, a sprayer, a seed drill, a disc harrow, a trailer, and other agricultural machinery to do all the work.
The businessman is borrowing 105000 € to purchase a disc cultivator Carrier XL 425-625, part of the loan will also be used to repay the existing loan. The farmer offers his 19,33 ha of farmland and the equipment to be purchased as collateral to secure the loan.
Project risks
Please note that investing in this project carries inherent risks, including the potential for the loss of profits and invested funds.
In the event that the Project Owner fails to fulfil their obligations, InSoil will take all necessary measures to safeguard the interests of investors and utilise the provided collateral. However, the Platform Operator does not guarantee the complete fulfilment of the Project Owner’s obligations.
There is also the possibility that carbon certificates may not be generated due to various reasons, such as the actions of Heavy Finance UAB, the project owner, or external factors.
Due to changes in market conditions, measurement methodologies and other factors, the price of carbon certificates is subject to change.