Green loan

About the farm

The farmer has been farming since 1999, when he inherited 30ha from his parents, and has since expanded his farm to 160ha, of which he owns 130ha. On the farm he is engaged in crop production and cattle breeding. He works independently on the farm. His sowing structure consists of 60ha of corn, 15ha of wheat, 30ha of rye, 15ha of alfalfa and 40ha of grassland. His herd consists of 28 milking cows, 10 in-calf heifers, 20 calves and 10 fattening cows.

On the farm he uses machinery such as:

• NEW HOLLAND tractor- 2010.
• MASSEY FERGUSON tractor- 2008.
• KRONE trailer- 2024. 
• FLIEGL trailer- 2015.

The farmer plans to expand the herd regularly over the next 3 years, he would like to buy at least 10 milking cows. In addition, he would like to buy out as much of the leased acreage as possible. 

The loan is to be used to complete the construction of a warehouse. 

Main Terms

The principal will be repaid by the farmer in regular instalments over the span of 4 years in accordance with the repayment schedule. 65 hectares of land are included in the Green Loan program. It is estimated that a total of 657 carbon certificates will be generated in 5 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 27000 EUR * 13% * 5 year = 17550 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): 15,8% IRR* Today's scenario (€35 per carbon certificate): 25,1% IRR* Optimistic scenario (€100 per carbon certificate): 55,77% 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.