Create an account to make your first investment in only few steps!
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.
LT0001331
| Project owner | Address |
|---|---|
| header_1 | Declared | Owned |
|---|---|---|
| Farming land | 171.43 ha | 43.78 ha |
| 2022 | 2021 | |
|---|---|---|
| Revenue | 188,223.00 € | 182,812.00 € |
| Net profit | 33,208.00 € | 12,311.00 € |
| Equity ratio | 20.39% | - |
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 is dedicated to the development of a Lithuanian farm. The farmer, who first gained experience working with a large Danish farmer, set up his own farm in 2005. Since then, the business established in the fertile Kaišiadoriai district has expanded to 171 hectares of declared farmland and practices no-till farming.
The farmer claims that competition for farmland in the region is high, making it difficult to expand. However, every year together with his family he manages to purchase several hectares from current landlords.
The farm's technical fleet consists of two tractors, a harvester, five trailers, a sprayer, and various smaller equipment.
This is not the farmer's first project on the HeavyFinance platform - he currently has three active loans (LT0000444, LT0000508, LT0000225) with a total balance of €200 000. The funds from this loan will be used to refinance the loan LT0000225 with €90 000 and the remaining € 20 000 will be used to settle his other financial liabilities. After the repayment, the active loan balance on the HeavyFinance platform will be € 220 000.
The farmer has been meeting his obligations with a timely manner and one loan of €26 250 (LT0000048) has already been repaid by the project owner.
To secure the loan, the project owner pledges 17 plots of land with a total area of 31,66 ha and its own John Deere tractor (2007), providing 68% 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 169 hectares of arable land are included in the Green Loan program. It is estimated that this farm will generate up to 3 109 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 12,8 million kilometres driven by an average gasoline-powered passenger vehicle.
Annualized return forecast
- Conservative scenario (€20 per carbon certificate): 15.8% IRR*
- Today's scenario (€35 per carbon certificate): 23.5% IRR*
- Optimistic scenario (€100 per carbon certificate): 47.8% 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.