Green loan

About the farm

The farmer has been farming since 2014, when he started it on his own by renting 13.5ha of land. Since then, he has managed to expand the farm to 86ha of which he owns 26ha. On the farm he works independently and is engaged in crop production and breeding beef cattle. His herd at the moment consists of 120 head of fattening cattle, and the sowing structure is: 15ha of corn, 20ha of winter barley, 20ha of triticale, 10ha of a cereal mixture consisting of oats and barley, 10ha of spring barley and 6ha of alfalfa. On the farm he uses machinery such as:

• MASSEY FERGUSON tractor 2024
• PICHON barrel truck 2017
• PRONAR 12-ton trailer 2017
• VICON front mower 2017
• MCHALE baler 2015

In 2018, he also built a new barn and crossing silos. In the next 3 years, the farmer mainly plans to buy new machinery for no-till, as at the moment he rents machinery every year for the season. He has already applied to the State program for funding to purchase a new no-till unit. He is also planning to expand his transit silos and increase his herd of beef cattle. Since the farmer already has the infrastructure and feed for a larger herd, he needs funds at this point to purchase 60 calves for fattening.

Main Terms

The principal will be repaid by the farmer in regular instalments over the span of 3 years in accordance with the repayment schedule.

45 hectares of land are included in the Green Loan program. It is estimated that a total of 221 carbon certificates will be generated in 4 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 22500 EUR * 12,5% * 4 year = 11250 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): 12,18% IRR*

Today's scenario (€35 per carbon certificate): 20,4% IRR*

Optimistic scenario (€100 per carbon certificate): 51,63% 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.