Green loan

About the farm

The farmer has been running the farm since 2002, when he started it on his own with the purchase of 55ha of land from an agricultural agency. Since then, he has managed to expand the farm to 148ha of which 116ha he owns. On the farm he works together with his father and son and they are engaged in crop production. His sowing structure is 60ha of triticale, 15ha of wheat, 20ha of lupine, 10ha of phacelia and 30ha of oats.

On the farm he uses machinery such as:

• AGRIO sprayer 2018
• FARMET cultivating and seeding unit 2019
• NEW HOLLAND tractor 2012
• METALSTAL stubble thicker 2012
• CASE combine harvester 2009

Over the next few years, the farmer plans to thoroughly modernize his machinery fleet. In particular, he is keen to buy a new no-till unit and purchase a new seeder. Last year the farmer was hit by a drought on 124.47ha, which reduced his yields by 50.22% from the year in question, and this is confirmed by the protocol. The farmer plans to use the funds for current production expenses and the purchase of a seeder.

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.

100 hectares of land are included in the Green Loan program. It is estimated that a total of 723 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 31000 EUR * 12% * 5 year = 18600 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): 13,69% IRR*

Today's scenario (€35 per carbon certificate): 22,03% IRR*

Optimistic scenario (€100 per carbon certificate): 50,2% 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.