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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.
-2,239,944 kg CO2e
PL0001417
Goal
41,193 €
Raised
41,193 €
Return rate 
19.1%
Rating
B
Period
36
Time left
LTV
70%
Country
Poland
Loan purpose
Working capital
Business information
Security measures
Loan history
Project owner | Address |
|---|---|
header_1 | Declared | Owned |
|---|---|---|
| Dirbama žemė | 220.00 ha | 33.00 ha |
| 2022 | 2021 | |
|---|---|---|
| Revenue | 85,433.00 € | 52,398.00 € |
| Net profit | - | - |
| Equity ratio | - | - |
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.
The current market price of a single carbon certificate is within the range of 25 - 35 EUR. 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
Meet our young and dynamic farmer who has transformed his farm from just a small plot of land to an impressive 220 hectares. This entrepreneur has been consistently increasing generated revenues and expanded the arable field by 70 hectares just last year.
The farmer adopted a regenerative farming method in the form of no-till, thanks to which every year at least one twenty hundred tonnes (according to the averages) of carbon dioxide are being removed from the atmosphere and sequestered into the soil. The exact amount of sequestered CO2 levels will be confirmed after periodic soil testing performed by the HeavyFinance team. The current loan will allow the farmer to sustain and expand the regenerative practices.
This is already the second loan for this farmer, who thanks to the HeavyFinance investor community, was able to finance the growth of the farm.
The farm is planted with 120ha of corn and 30ha of sunflowers. Due to the farm's rapid expansion, he rents most of his machinery, but the farmer owns a 2011 John Deere 6430 Premium tractor and a 2012 Maschio Gaspardo baler. The farmer is awaiting a refund from the Rural Development Programme of 250 000 PLN, which he will use to purchase machinery, and a refund of 600 000 PLN, which he will use to construct or modernize buildings on the farm.
At the moment, the farmer needs funds for current expenses and to refinance the interest-bearing loan he already has with us. He is just in the process of negotiating the purchase of 15 hectares of land, which he will probably be able to buy in a month's time, and for this purpose, he will apply, for another 0% loan.
Investing in this Green Loan puts you and your capital right on the frontier of the climate change fight, and provides the necessary funds for the farmer to continue on making a positive impact on our climate for us all.
Main Terms
The principal will be repaid by the farmer in regular instalments over the span of 3 years in accordance with repayment schedule.
70 hectares of arable land are included in the Green Loan program. It is estimated that this farm will generate up to 1 288 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 second 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 12,5% annual interest.
CO2 emissions to be removed from the atmosphere because of this loan are equal to 5,3 million kilometres driven by an average gasoline-powered passenger vehicle.
Annualized return forecast
- Conservative scenario (€20 per carbon certificate): 12.5% IRR*
- Today's scenario (€35 per carbon certificate): 19.1% IRR*
- Optimistic scenario (€100 per carbon certificate): 40.4% 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.