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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.
-2,879,928 kg CO2e
LT0001688
Goal
43,000 €
Raised
43,000 €
Return rate 
25.1%
Rating
C+
Period
36
Time left
LTV
59%
Country
Lithuania
Loan purpose
Equipment purchase
Business information
Security measures
Loan history
| Project owner | Address |
|---|---|
| header_1 | Declared | Owned |
|---|---|---|
| Farming land | 101.52 ha | 0.00 ha |
| 2022 | 2021 | |
|---|---|---|
| Revenue | 171,437.00 € | 77,893.00 € |
| Net profit | 31,880.00 € | 31,617.00 € |
| Equity ratio | 1.67% | - |
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 certificate 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
The young farmer registered his farm in 2019, but gained his experience on his grandfather's farm, from which he inherited all the equipment he needs to work the land - a tractor, a combine harvester and tillage implements. He farms over 101 hectares of wheat, barley and oilseed rape. He works alone on the farm and does not employ any additional staff.
The farm has a John Deere tractor, purchased last year, and other implements such as a New Holland combine harvester.
The farmer currently has two loans on the HeavyFinance platform which he is paying on time.
The farmer has been working the land in a bearimic way since the establishment of the farm and has therefore decided to apply additionally to the HeavyFinance community for a Green Loan, on the basis of which he will be able to meet the objectives necessary for the development of the farm. The loan will be secured by a mortgage on a plot of land with buildings.
The farmer's objective is to own at least 150 hectares of land in the next couple of years, and will have acquired 17 hectares of land, which he will take over from his grandmother (succession documents are being processed).
Main Terms
The principal will be repaid by the farmer in regular instalments over the span of 3 years in accordance with the repayment schedule.
90 hectares of arable land are included in the Green Loan program. It is estimated that a total of 664 carbon certificates will be generated in 4 years (based on a conservative estimation). Consequently, investors will receive a portion of sales proceeds from every carbon certificate generated throughout the span of 4 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 fourth 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 4 years has elapsed, it undertakes to reimburse 14% annual interest.
CO2 emissions to be removed from the atmosphere because of this loan are equal to 1,7 million kilometres driven by an average gasoline-powered passenger vehicle.
Annualized return forecast
- Conservative scenario (€20 per carbon certificate): 14.4% IRR*
- Today's scenario (€35 per carbon certificate): 25.1% IRR*
- Optimistic scenario (€100 per carbon certificate): 71.6% 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.