Green loan

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

Elizabeth inherited the farm from her parents in May 1990. The farmer has been involved in farming since childhood so taking over the parents' farm was an obvious and natural thing to do for her.

She's currently involved in cattle farming and breeds pure Simmental (SM) cattle. The farmer has a herd of 10 cows and 16 calves. She chose this breed because it is more resistant to disease, which results in lower maintenance costs. All the calves remain on the farm in her care - of which she leaves the heifers for milk production and sells the bulls for meat production.

The milking parlour is equipped with Alfa Lawal conical milking machines and Japy 650 litre milk cooling tanks.

The fodder is produced by the farmer herself from rye and triticale, she only buys beet pulp. 

The current seed structure consists of:

• triticale - 11 ha
• lupin - 10ha 
• buckwheat - 9 ha
• lucerne - 3ha 

13 hectares of land are pastures and grassland that are exclusively used for fodder and for the cows to roam freely.

The project owner owns 3 tractors, 2 of which have front loaders, and has all the machinery needed for livestock and crop production, but outsources the no-tillage work to contractors to save time and money. She also employs two workers for seasonal work such as dunging and harvesting.

Mrs Elżbieta rears livestock in a sustainable way to avoid stressing the animals.
Cover crops are sown into the soil, and care is taken to ensure that the soil is balanced - if the straw is removed, it is returned to the field as manure or a catch crop is sown.

The farmer is aware that the use of organic feed ingredients has a practical impact on the health of the cows, which will allow them to make the planned profits from selling milk and meat as organic. Moreover, thanks to organic production, the farmer receives higher subsidies.

The financing from HeavyFinance will be used to purchase 8 heads of purebred Simentali cattle. The cost ranges from €1,775 to €2,663 per cow.
If purchased at a lower price, the rest of the funds will be used to modernise buildings on the farm.

The farmer adopted a regenerative farming method in the form of no-till about 5 years ago, thanks to which every year one 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.

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 the repayment schedule.

All 33 hectares of arable land are included in the Green Loan program. It is estimated that this farm will generate up to 607,2 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 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 10 years have elapsed, it undertakes to reimburse 14% annual interest.

CO2 emissions to be removed from the atmosphere because of this loan are equal to 25,1 million kilometres driven by an average gasoline-powered passenger vehicle.

Annualized return forecast

• Conservative scenario (€20 per carbon certificate): 13.5% IRR*
• Today's scenario (€35 per carbon certificate): 18.7% IRR*
• Optimistic scenario (€100 per carbon certificate): 38.7% 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.