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.
-1,662,357 kg CO2e

PL0002127

Goal
25,500 €
Raised
25,500 €
100%
Return rate
29.9%
Rating
A
Period
48
Time left
LTV
56%
Country
Poland
Loan purpose
Equipment purchase
Business information
Security measures
Loan history
Project owner Address
Xłxżxx Xxxxłx
Xxxxxxx 83, 83-212 Xxxxxx
header_1 Declared Owned
Dirbama žemė80.00 ha35.00 ha
20232022
Revenue 133,515.92 € 119,644.63 €
Net profit 16,425.00 € 1,723.00 €
Equity ratio - -
Project description
Documents
Payment schedule

About the farm

The farmer has been farming since 2011, when he took over 25ha from his parents. He has since expanded his farm to 80ha of which he owns 35ha. He employs one worker on the farm and grows crops and raises beef cattle. His herd consists of 100 head, and the sowing structure is 11.5ha of wheat, 12.5ha of rapeseed, 11.5ha of triticale, 10ha of corn, 6ha of oats, 4ha of clover and 1ha of alfalfa. On the farm he uses machinery such as:

JOHN DEERE 5080R tractor 2011

MCHALE 2023 round baler

POTTINGER 2023 rake

POTTINGER 2023 tedder

2x POTTINGER 2023 lawn mower

LEMKEN sprayer 2017

LEMKEN tillage and seeding unit 2017

PICHON 2017 manure spreader

Disc harrow LEMKEN 2017

In the next 3 years, the farmer plans to build silage silos on his farm and buy 5ha of land.

Funds from the loan are to go to pay the down payment for the purchase of a VALTRA T215 tractor. The tractor is brand new and will be ready for delivery within 3 months. The farmer is counting on getting a positive decision for the purchase of the tractor from the agricultural modernization program, but is also prepared to buy it with his own funds.   

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.

52 hectares of land are included in the Green Loan program. It is estimated that a total of 556 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 2025. 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 25500 EUR * 11% * 5 year = 14025 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): 17,2% IRR*
Today's scenario (€35 per carbon certificate): 29,9% IRR*
Optimistic scenario (€100 per carbon certificate): 84,4% 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.