HeavyFinance has launched a product for impact investing – Green Loans. Investors in these loans will earn from the sale of carbon certificates generated in the invested farm. Now, let’s take a look at how Green Loans work and how you can benefit from them.
Green Loans have significant impact on the environment while generating lucrative returns. Sounds like it’s too good to be true? Well, that’s the reality: investing in saving the planet pays off greatly.
What is a carbon certificate?
As we navigate towards a more sustainable and low-carbon future, buying carbon credits has become a crucial way to support this transition. Carbon credits create a monetary incentive for companies to reduce their carbon emissions. Proponents of the carbon credit system, like HeavyFinance, support and precisely measure sustainable practices to generate and sell carbon certificates.
Read more about carbon certificates in a blog post: How Much Are Carbon Credits Worth.
How Green Loans work?
Carbon Farming is a new and innovative approach to agriculture that aims to store carbon in the soil, thus reducing the amount of CO2 in the atmosphere.
Carbon Credits are created through projects that remove or reduce carbon emissions. These projects can include renewable energy projects, reforestation, and sustainable land management practices. Each project is independently verified to ensure that the carbon credits generated are real, measurable, and permanent. Once the project is verified, carbon credits are issued and can be traded on the carbon market.
HeavyFinance focus on helping farmers shift to carbon farming. In essence, when a farmer takes out a Green Loan, they commit to implementing regenerative land management practices, such as no-till farming, to store carbon in the soil and create carbon certificates.
Read more about carbon farming in a blog post: Why Switching to No-till Farming Makes Perfect Sense.
Repayment and returns
To support and incentivise farmers in their transition to regenerative practices, HeavyFinance has introduced Green Loans, a financial product with two distinct approaches: “Supporting Sustainable Farmers” and “Pushing the Transition.”
Supporting Sustainable Farmers
This approach is designed for farmers who have already embraced regenerative farming practices. These farmers are leading the way in creating a positive impact on the environment and mitigating climate change. Here are the key aspects of this loan product:
Minimum IRR and Loan Term: To ensure attractive returns for investors, the minimum Internal Rate of Return (IRR) we aim for is 25% at 35€ per carbon credit. The maximum loan term for such projects is five years, while we target an average term of approximately four years.
Period for Investor’s Carbon Credits: Investors will receive the farmer’s share of carbon credits during a 12-month period following the loan repayment. For instance, if the loan term is 40 months, investors can expect to receive their share of carbon credits for at least 52 months.
Distribution of Carbon Credits: Throughout the loan term, the investor’s share is set at 60%, and it adjusts to 40% during the additional year after the loan’s repayment. This distribution ensures investors can capitalize on the environmental impact of the regenerative practices implemented by the sustainable farmers.
Pushing the Transition
This approach targets farmers who are eager to switch from traditional farming methods to regenerative practices but need financial support to make this transformation. Here are the key features of this approach:
Minimum IRR and Loan Term: For projects under this category, we aim for a minimum IRR of 20% at 35€ per carbon credit. The maximum loan term is five years, with an average term of around four years.
Period for Investor’s Carbon Credits: Investors in such projects will receive the farmer’s share of carbon credits for an extended period—three years after the loan repayment. This means that if the loan term is 40 months, investors will receive their share of carbon credits for at least 76 months.
Distribution of Carbon Credits: Throughout the entire project term, investors maintain a share of 60% of the carbon credits, ensuring they play a vital role in driving the transition to sustainable farming practices.
The Green Loans program from HeavyFinance offers a secure and growing investment opportunity with the added benefit of making a positive impact on the environment. By investing in these innovative financial products, investors can earn returns from the carbon certificates generated by borrowing farms, while also promoting regenerative farming practices and reducing carbon emissions.
The value of carbon credits is well established and offers a reliable return on investment. As companies strive to achieve zero net emissions goals, demand for carbon certificates is expected to rise, making the price more lucrative over time. Moreover, the collateral of the land and equipment used by the farmer offers an added layer of security
Green Loans are open for investments
Overall, Carbon Credits are a powerful tool for fighting climate change by providing a financial incentive for companies to reduce their carbon emissions. And the means of acquiring those valuable credits is through Carbon Farming practices.
You will find Green Loans in our Projects Page. These loans have bright green background to make them easier to spot.
Don’t miss the chance to be a part of the HeavyFinance revolution and help make a real difference in the fight against climate change. Join us today and be a part of the solution.
If you are interested in learning more about HeavyFinance’s Green Loan program or investing in sustainable agriculture, please do not hesitate to contact us at [email protected]
