The national development bank ILTE has signed a cooperation agreement with HeavyFinance and has started investing in Green Loans for farmers. The returns from loans provided through the HeavyFinance platform will be generated by creating and selling carbon emission certificates on farms.
ILTE invests up to 40% of the loan amount or up to €30,000 from its financial engineering instrument, the Crowdfunded Loan “Avietė,” into loans for Lithuanian farmers that meet specific criteria. The remaining loan amount is financed by investors through the HeavyFinance platform. This funding supports the purchase of machinery and arable land, as well as increasing working capital.
“A recent European Commission study on business financing in the European Union revealed that banks operating in Lithuania reject the highest percentage of small and medium-sized business loan applications in the EU. This issue is even more pronounced in the agricultural sector. Therefore, ILTE’s decision to support innovative loan financing will provide farmers with better opportunities to transition to sustainable agriculture,” commented Laimonas Noreika, CEO of HeavyFinance.
Together with Avietė funds, HeavyFinance plans to lend more than €8 million by the end of the year.
“The Crowdfunded Loan ‘Avietė’ is one of ILTE’s alternative financial instruments that helps small and medium-sized businesses obtain market-based loans when traditional financing is unavailable. For several years now, Avietė has been increasing access to capital for SMEs. By investing in Green Loans, we aim to encourage small farms to develop their businesses while contributing to positive environmental impact,” stated Inga Beiliūnienė, Head of Business Development and Board Member at ILTE.
Eligibility and Loan Conditions
Lithuanian farms operating for at least two years can apply for Avietė loans to finance investments or working capital. Loan financing requires collateral in the form of real estate or other assets. Farmers receive direct feedback from the HeavyFinance platform on whether they meet Avietė’s conditions and HeavyFinance’s risk assessment criteria.
Returns Generated from Corporations
Green Loans are provided to farmers at 0% annual interest. The loan returns are generated through the implementation of sustainable farming practices and the verification of reduced CO2 emissions.
Using the methodology of the U.S.-based organization Verra, HeavyFinance assists farmers in transitioning to more sustainable agriculture. As a result of these changes, one carbon emission certificate is created for each ton of CO2 reduced, currently valued at approximately €35 on the market. On average, farms receiving Green Loans remove two tons of carbon dioxide per hectare per year. These funds generate double-digit returns for investors, cover consultation and verification costs, and provide additional income for farmers.
The carbon emission certificates generated by farmers participating in HeavyFinance’s program are sold on the voluntary international market. Businesses purchase these certificates to offset their unavoidable CO2 emissions. Among the largest buyers in this market are tech giants such as Microsoft, Google, and Salesforce, as well as airlines like Delta and entertainment and media company Disney.
HeavyFinance has already provided over 2,400 agricultural loans totaling more than €70 million. The company offers financial services to farmers in Lithuania, Poland, Latvia, Bulgaria, and Portugal. It also invites farmers to join its Carbon Farming Program, which helps implement sustainable practices and create carbon emission certificates (carbon credits) on farms.
Avietė: Lithuania’s First Crowdfunded Loan Instrument
Avietė is Lithuania’s first crowdfunded loan initiative in which the government directly finances business needs alongside other investors through alternative financing platforms. The Ministry of Economy and Innovation has allocated €40 million in state funds to Avietė. These funds come from the successful use of European Union structural funds from the 2007–2013 financial period, which have been returned or are expected to return through implemented measures. Avietė enables small and medium-sized enterprises to borrow through crowdfunding platforms, facilitating better access to financing for business development.
