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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.
-3,359,916 kg CO2e
LT0001618
Goal
57,000 €
Raised
57,000 €
Return rate 
25.3%
Rating
B+
Period
30
Time left
LTV
66%
Country
Lithuania
Loan purpose
Refinancing
Business information
Security measures
Loan history
Project owner | Address |
|---|---|
header_1 | Declared | Owned |
|---|---|---|
| Dirbama žemė | 103.75 ha | 30.51 ha |
| 2022 | 2021 | |
|---|---|---|
| Revenue | 115,146.00 € | 80,196.00 € |
| Net profit | 92,084.00 € | -32,187.00 € |
| Equity ratio | 43.14% | - |
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
Since 2014, the farmer has established a farm in the Alytus district, growing wheat, barley and rapeseed, as well as 11 dairy cattle.
The farm currently declares 103,75 ha of land, of which 30,51 ha is owned, which is planned to be expanded to 150 ha in the next couple of years.
The farm's machinery fleet currently consists of a tractor, a sowing machine and other implements for working the land. The farmer uses modern technology for cultivating his land.
The farmer is seeking to participate in the carbon credit programme and to obtain a Green Loan, which would cover the existing loans on the HF platform amounting to EUR 54 300, which have been executed without fault up to this point, and the farmer has paid two loans on time.
The new loan will be secured by a Massey Ferguson tractor used on the farm.
Main Terms
The principal will be repaid by the farmer in regular instalments over the span of 3 years in accordance with repayment schedule.
105 hectares of arable land are included in the Green Loan program. It is estimated that this farm will generate up to 579 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 11% annual interest.
CO2 emissions to be removed from the atmosphere because of this loan are equal to 1.5 million kilometres driven by an average gasoline-powered passenger vehicle.
Annualized return forecast
- Conservative scenario (€20 per carbon certificate): 14,6% IRR*
- Today's scenario (€35 per carbon certificate): 25.3% IRR*
- Optimistic scenario (€100 per carbon certificate): 70.5% 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.