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

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 third loan for this farmer (third in general and the second as a green loan), 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.
With those funds, he plans to buy a new seeder, a new no-till unit, and to put a silo and a hall for machines on the farm.

Thanks to this loan from HeavyFinance, the farmer will be able to purchase 16,5ha of land. He already pre-paid 30% of the land's value and now needs funds to finalize the deal.

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 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.

70 hectares of arable land are included in the Green Loan program. It is estimated that this farm will generate up to 1 380 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.

The first carbon certificates are expected to be generated and sold in the second quarter of 2024. The exact return will depend on the number 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, it undertakes to reimburse 16.6% annual interest.

CO2 emissions to be removed from the atmosphere because of this loan are equal to 5,7 million kilometres driven by an average gasoline-powered passenger vehicle.

Annualized return forecast

• Conservative scenario (€20 per carbon certificate): 16.6% IRR*
• Today's scenario (€35 per carbon certificate): 24.7% IRR*
• Optimistic scenario (€100 per carbon certificate): 51% 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.