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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.
-7,383,813 kg CO2e
LT0001617
Goal
91,800 €
Raised
91,800 €
Return rate 
26.3%
Rating
B
Period
37
Time left
LTV
59%
Country
Lithuania
Loan purpose
Refinancing
Business information
Security measures
Loan history
| Project owner | Address |
|---|---|
| header_1 | Declared | Owned |
|---|---|---|
| Farming land | 669.17 ha | 36.60 ha |
| 2022 | 2021 | |
|---|---|---|
| Revenue | 746,527.00 € | 561,767.00 € |
| Net profit | 54,759.00 € | 7,600.00 € |
| Equity ratio | 23.2% | - |
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
With this project, we invite you to invest in the development of a Lithuanian capital company. Established eleven years ago, UAB Verslo Valstija currently operates 669,17 ha of land (with 230,75 ha enrolled 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. With this financing, loan LT0000063 and LT0000273 will be refinanced.
UAB Verslo Valstija has already fully repaid 6 loans in total of 190 000 €. Investors have earned over 140 000 € of interest from total customers exposure.
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 230,75 hectares of arable land are included in the Green Loan program. It is estimated that this farm will generate up to 1275 carbon certificates in 3 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 3 years as the following terms;
- 60% of income share during the loan period
- 40% of income share for the following year after the loan period
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 3 years have elapsed, it undertakes to reimburse 13% annual interest.
CO2 emissions to be removed from the atmosphere because of this loan are equal to 3,3 million kilometres driven by an average gasoline-powered passenger vehicle.
Annualized return forecast
- Conservative scenario (€20 per carbon certificate): 14,9% IRR*
- Today's scenario (€35 per carbon certificate): 26.3% IRR*
- Optimistic scenario (€100 per carbon certificate): 77.8% 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.