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.
-5,759,856 kg CO2e

LT0003268

Goal
63,000 €
Raised
41,893 €
66%
Return rate
11.94%
Rating
B
Period
36
Time left
LTV
90%
Country
Lithuania
Loan purpose
Working capital
Business information
Security measures
Loan history
Project owner
Address
Xxxxxx Xxxxx Xxxxxxxxx
Xxxxxxxx x. xxx., Xxxxčxų xxx., Xxxxžxxx,
header_1
Declared
Owned
Farming land726.40 ha470.00 ha
20242023
Revenue 934,865.00 € 1,508,494.00 €
Net profit 197,507.00 € 78.00 €
Equity ratio 44.34% -
Project description
Documents
Payment schedule

FARM OVERVIEW

The project owner has been farming since 2001 and currently operates a large-scale crop farming business in the Pasvalys district. The total declared agricultural land amounts to 726.40 hectares, of which 470 hectares are owned by the farmer, while the remaining land is farmed under lease agreements. The farm is continuously expanding, and the high share of owned land provides a strong asset base and long-term operational stability.


CROPS AND FARMING PRACTICES

The farm focuses on the cultivation of wheat and rapeseed, which are core crops generating stable and predictable revenues. Since last year, the farmer has begun implementing no-till farming practices, which help reduce fuel consumption, improve soil structure, and enhance long-term productivity. This approach aligns with sustainable agriculture principles and contributes to cost efficiency.


MACHINERY AND INFRASTRUCTURE

The farm’s machinery fleet includes several tractors, two combine harvesters, and other essential agricultural equipment, enabling all key field operations to be carried out independently and on time. The farm is also equipped with grain drying facilities and on-site grain silos, allowing harvested crops to be stored and sold when market conditions are more favorable.


PURPOSE OF FINANCING

The farmer has applied to the Insoil investor community for a Green Loan. The loan proceeds will be used to increase working capital and to settle payments with suppliers, ensuring smooth day-to-day operations and stable cash flow throughout the production cycle.


LOAN SECURITY

The loan will be secured by pledging four land plots owned by the farmer. Considering the substantial owned land portfolio and the farmer’s long-standing experience, the level of collateral is assessed as sufficient and reliable for investors.


PROJECT ASSESSMENT

The project is considered an attractive investment opportunity based on the following factors:

  • more than 20 years of farming experience,
  • a very large and stable cultivated land area,
  • a significant share of owned land (470 ha),
  • a modern machinery base and grain storage infrastructure,
  • the implementation of sustainable no-till farming practices,
  • a clear and working-capital-focused use of funds.

This project offers investors the opportunity to support a large, efficiently managed, and sustainably developing crop farm, with the potential for stable and predictable returns."     


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.

180 hectares of land are included in the Green Loan program. It is estimated that a total of 816 carbon certificates will be generated in 4 years (based on a conservative estimation). Consequently, investors will receive below indicated portion of sales proceeds from every carbon certificate generated from the land of the project owner involved in the program;
(1) 60% of income received during the loan period;
(2) 40% of income received for the following year after the loan period.

It is expected that the first carbon certificates will be generated and sold in the second quarter of 2026. The exact return will depend on the amount of sequestered CO2 levels and the sale price of the carbon certificates.

If the project owner (farmer) withdraws from the Carbon Credits Agreement and does not intend to follow the agreement on the carbon revenue split with investors, the project owner will be obliged to repay the entire loan as well as pay the penalty, calculated by multiplying the interest rate by the entire loan amount and period equal to the duration of the loan agreement plus 12 (twelve) months.
Investors of this loan would receive a penalty of 63000 EUR * 12% * 4 year = 30240 EUR. This penalty can be reduced by the return earned by investors from the carbon credits generated

If the project fails to be delivered successfully through no fault of the farmer, the farmer commits to paying investors a minimum interest rate of EURIBOR 6M + 1.5%. This commitment applies in situations such as the lack of market demand for selling carbon credits, among others.


Annualized return forecast
Conservative scenario (€20 per carbon certificate): 7.32% IRR*
Today's scenario (€35 per carbon certificate): 11,94% IRR*
Optimistic scenario (€100 per carbon certificate): 27,82% 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.

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.