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.
-7,999,800 kg CO2e

PL0002209

Goal
95,865 €
Raised
95,865 €
100%
Return rate
22%
Rating
A
Period
47
Time left
LTV
48%
Country
Poland
Loan purpose
Farm buildings purchase/construction
Business information
Security measures
Loan history
Project owner Address
Xxxxxx Xxxxxx
Xxxxxxx 14, 66-340 Xxxxxxxxxx
header_1 Declared Owned
Farming land640.00 ha208.00 ha
20232022
Revenue 576,692.97 € 271,585.14 €
Net profit - -
Equity ratio - -
Project description
Documents
Payment schedule

About the farm

The farmer has been farming since 2004, when he took over 28ha from his parents. Since then, he has managed to expand the farm to 640ha of which he owns 208ha. He runs the farm jointly with his father and is involved in crop production. His sowing structure is 82ha of oats, 71ha of rye, 40ha of barley, 192ha of mustard, 108ha of oil radish, 56ha of corn and 88ha of red fescue grass for seed. On the farm he uses such as:

FENDT tractor 2011

CLAAS tractor 2012

HORSCH aggregate 2014

MATROT sprayer 2013

HORSCH reloading trailer 2014

METALTECH trailer 2014 x2

The farmer plans to gradually expand his farm over the next few years. As of September, his farm will expand by an additional 22.5ha, in which he has a priority clause to purchase this land and after a 4-year lease, he plans to buy it. His main goal is to upgrade the machinery on his farm to newer and more efficient ones. 

The funds from the loan will be used to enlarge the grain store, repair the store's roof, purchase a HORSCH disc harrow and funds for fertilizer. 

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.
250 hectares of land are included in the Green Loan program. It is estimated that a total of 1562 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 95865 EUR * 11% * 5 year = 52725,75 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): 13,23% IRR*
Today's scenario (€35 per carbon certificate): 22,02% IRR*
Optimistic scenario (€100 per carbon certificate): 55,15% 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.