Green loan

About the farm

Since 2019, a crop farming enterprise has been established in the Pasvalys district, cultivating wheat, rapeseed, and other crops. The farm comprises 833,99 hectares of arable land, of which, according to the farmer, 200 hectares are owned by the farmer. The farmer has reported that the total cultivated land exceeds 1,000 hectares.

The farm’s equipment inventory includes two combines, several tractors, a seeder, a sprayer, a trailer, and other agricultural machinery. The farmer employs a no-till farming technique for soil cultivation.

The farmer has approached to the HeavyFinance community seeking a loan to increase working capital. To secure the loan, the farmer is offering land with buildings as collateral.

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.

380 hectares of land are included in the Green Loan program. It is estimated that a total of 3715 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;
60% of income received during the loan period;
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 140000 EUR * 12% * 5 year = 84000 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): 13,34% IRR*
Today's scenario (€35 per carbon certificate): 21,32% IRR*
Optimistic scenario (€100 per carbon certificate): 47,91% 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.