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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.
-14,079,648 kg CO2e
LT0001247
| Project owner | Address |
|---|---|
| header_1 | Declared | Owned |
|---|---|---|
| Farming land | 536.72 ha | 36.60 ha |
| 2022 | 2021 | |
|---|---|---|
| Revenue | 746,527.00 € | 561,767.00 € |
| Net profit | 54,759.00 € | 7,600.00 € |
| Equity ratio | 18.56% | - |
Documents
Payment schedule
Can capital help solve climate change?
What are carbon certificates?
About the farm
With this project, we invite you to invest in the development of a Lithuanian capital company. Established eight years ago, Verslo Valstija UAB currently operates on about 540 ha of land (with 440 ha enrolls in carbon farming program) and has created over 17 jobs for the region's population. The farm is intensively engaged in crop production, growing cereals such as wheat, rape and barley. Biofuel production and storage services are also provided, accounting for around 10% of the company's turnover.
Recently, the company has been focusing on modernising and upgrading its machinery fleet. The company's management is convinced that this is the key to success in order to harvest a higher tonnage of grain per hectare. The company's machinery fleet consists of several different tractors, a combine harvester, a sowing machine, a cultivator, a telehandler and other equipment necessary for its operations.
This is not the first project the company has financed on the HeavyFinance platform. Using the funds raised on the HeavyFinance platform, the company has bought the necessary fertilisers and pesticides by the end of 2021. Given the rising prices of fertiliser these days, this has enabled the company to save over €150 000. In addition, the funds enabled the company to rent additionally 100 ha of land.
Verslo Valstija has fully covered 2 loans total amount 26.800 €. With the fund receive from this loan, 4 existing loans will be fully covered and will leave a total active loan balance of 639k € from 886k € borrowed (including this loan), with a total collateral value of 984k €. The HeavyFinance investor community has earned 117k € interest in total.
The loan is secured by a pledge on 21 land plots (total 36,60 ha), 6 buildings (total 1.800 m²), the same asset which were secured for 4 refinancing loans, giving 80% LTV.
Main Terms
The principal will be repaid by the farmer in regular instalments over the span of 3 years in accordance with repayment schedule.
All 440 hectares of arable land are included in the Green Loan program. It is estimated that this farm will generate up to 8 096 carbon certificates in 10 years (based on a conservative estimation). Consequently, investors will additionally receive a portion of sales proceeds from every carbon certificate generated throughout the span of 10 years.
It is expected that the first carbon certificates will be generated and sold in the first quarter of 2024. The exact return will depend on the amount of sequestered CO2 levels and the sale price of the carbon certificates.
If the farm withdraws from the Green Loan without a period of at least 10 years have elapsed, it undertakes to reimburse 12% annual interest.
CO2 emissions to be removed from the atmosphere because of this loan are equal to 32 million kilometres driven by an average gasoline-powered passenger vehicle.
Annualized return forecast
- Conservative scenario (€20 per carbon certificate): 20.0% IRR*
- Today's scenario (€35 per carbon certificate): 29.4% IRR*
- Optimistic scenario (€100 per carbon certificate): 59.3% IRR*
Read more about the return scenarios in the document section
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.