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Green loan
Green Loan is a type of financing that enables farmers to use the proceeds for projects contributing to the environment. For investors, Green Loans give an opportunity to indirectly contribute to the generation of high-quality soil carbon credits, which are later sold on the Voluntary Carbon Market and receive part of the proceeds from their sale.
-3,999,900 kg CO2e
LT0002204
| Project owner | Address |
|---|---|
| header_1 | Declared | Owned |
|---|---|---|
| Farming land | 131.10 ha | 10.00 ha |
| 2023 | 2022 | |
|---|---|---|
| Revenue | 119,957.00 € | 164,053.00 € |
| Net profit | 20,415.00 € | -33,311.00 € |
| Equity ratio | 26.4% | - |
Documents
Payment schedule
About the farm
HeavyFinance invites you to invest in a loan for a crop farm in Skuodas district. The farm has been operating since 2014. The farmer declares 131,1 ha of land, of which 10 ha are owned. Farmer together with his family (sister, father, brother-in-law and fatrher-in-law) controls around 600 ha.
The farmer grows wheat, barley, rapeseed and other crops.
The farm has a combine harvester, a tractor and other necessary cultivation implements. The farmer works the land using no-till technology.
There are no additional employees hired on the farm, as the family members are sufficient.
The farmer is asking the HeavyFinance community for a green loan. The loan will be used to refinance his sister's farm loan on a HeavyFinance platform. The loan will be secured by 20.99 ha of land.
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.
125 hectares of land are included in the Green Loan program. It is estimated that a total of 1395 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 51000 EUR * 13% * 5 year = 33150 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): 12,51% IRR*
- Today's scenario (€35 per carbon certificate): 21,07% IRR*
- Optimistic scenario (€100 per carbon certificate): 54,2% 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.
Project risks
Please note that investing in this project carries inherent risks, including the potential for the loss of profits and invested funds.
In the event that the Project Owner fails to fulfil their obligations, HeavyFinance will take all necessary measures to safeguard the interests of investors and utilise the provided collateral. However, the Platform Operator does not guarantee the complete fulfilment of the Project Owner’s obligations.
There is also the possibility that carbon certificates may not be generated due to various reasons, such as the actions of Heavy Finance UAB, the project owner, or external factors.
Due to changes in market conditions, measurement methodologies and other factors, the price of carbon certificates is subject to change.