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.
-4,191,895 kg CO2e

LT0001248

Goal
65,000 €
Raised
65,000 €
100%
Return rate
28.2%
Rating
B+
Period
32
Time left
LTV
75%
Country
Lithuania
Loan purpose
Working capital
Business information
Security measures
Loan history
Project owner Address
Xxxxxx Šxxxčxūxxx
Xxxxšxxx xxxx., Xxxxxxx xxxxxxxxx., Xxxxxxxx xxx.
header_1 Declared Owned
Farming land198.91 ha67.32 ha
20212020
Revenue 176,971.00 € 104,474.00 €
Net profit 65,818.00 € 36,498.00 €
Equity ratio 56.96% -
Project description
Documents
Payment schedule

Can capital help solve climate change?

Thanks to Green Loans, a new Heavy Finance investment product, the answer is yes!

Green Loans allow you to provide financing for environmental solutions making a real positive change to our climate while making a great return on your investment. At HeavyFinance, we open the door for retail and institutional investors to the growing market of carbon certificates, offering an opportunity for a significant return with a significant impact. We encourage you to learn more about the potential of the carbon certificates market on our blog.

What are carbon certificates?

A carbon certificate is a unit of exchange that companies and organisations can use to offset their greenhouse gas emissions. One carbon certificate is equivalent to one metric ton of greenhouse gases removed from the atmosphere, and farmers engaged in no-till practice on average remove 2.3 tonnes of carbon dioxide per hectare from the atmosphere every year.

As the current market price of a single carbon certificate is within the range of 25 - 35 EUR, only one hectare of agricultural land with adopted no-till practice can generate 58 - 81 EUR per year.

As more and more companies are targeting zero net emissions goals, the demand and therefore the price of carbon certificates is expected to increase over time. Moreover, as all HeavyFinance sustainability projects are verifiable and accurately track their actual carbon dioxide sequestration, the quality of our carbon certificates can be sold at a market premium, further increasing the return on investment. Read more on carbon certificate pricing in our blog and learn why HeavyFinance provides you with the best exposure to the carbon market.


About the farm

This project invites you to contribute to the development of a mixed farm. Established in 2010 in Rokiškis district, the farm manages 198.91 ha of land, of which 67.32 ha is owned.

The main activity of the farm is crop and sheep farming, with about 120 ha of land under cultivation and the rest of the land left for meadows and pastures. Crops grown on the most productive land include wheat, rapeseed, peas and oats. There are also a total of 440 sheep on the farm.

The entrepreneur works alone on the farm, using a tractor, a front-end loader and other necessary tools to carry out essential chores. This year, the entrepreneur plans to expand the area of land under cultivation to 210 hectares and to increase the number of sheep on the farm to 500.

The farmer maintains the crop farm using the latest technology and all the ploughed areas on the farm are ploughed under no-till farming approach. As an active environmentalist, he approached the HeavyFinance community about the possibility of participating in the Green Loans project for carbon conservation.
The farmer is now seeking a loan which will be used to cover the advance payment for the tractor he is buying and to cover his existing loans (LT0000153, LT0000802), which have a total outstanding balance of EUR 35 588.64. The farmer has also already fully repaid loan LT0000014. To secure the loan, the Agrio Napa 3300 trailed sprayer and a plot of land will be pledged.

Main Terms

The principal will be repaid by the farmer in regular instalments over the span of 3 years in accordance with repayment schedule.

131 hectares of arable land are included in the Green Loan program. It is estimated that this farm will generate up to 2 410 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 9,6 million kilometres driven by an average gasoline-powered passenger vehicle.



Annualized return forecast

  • Conservative scenario (€20 per carbon certificate): 19.2% IRR*
  • Today's scenario (€35 per carbon certificate): 28.2% IRR*
  • Optimistic scenario (€100 per carbon certificate): 57.0% IRR*
Read more about the return scenarios in the document section

*The internal rate of return (IRR) is a metric used in financial analysis to estimate the profitability of potential investments. Learn more about it

Keep in mind that the return forecast is an estimation and does not guarantee you the returns mentioned above.

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.