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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.
-1,100,131 kg CO2e
PL0002310
| Project owner | Address |
|---|---|
| header_1 | Declared | Owned |
|---|---|---|
| Dirbama žemė | 37.00 ha | 37.00 ha |
| 2024 | 2023 | |
|---|---|---|
| Revenue | 161,804.27 € | 101,190.78 € |
| Net profit | - | - |
| Equity ratio | - | - |
Documents
Payment schedule
About the farm
The farmer has been farming since 2015, when he took over the farm from his parents, since then he has expanded his farm to 37ha and he owns the whole property. On the farm he is engaged in crop production and breeding beef cattle. On the farm he works independently. His sowing structure consists of 17ha of corn, 8ha of triticale, 8ha of beets, 2ha of onions and the rest is grassland. His herd consists of 85 head of cattle .
On the farm he uses machinery such as:
- baler MCHALE 2021
- tractor KUBOTA 2021
- disc harrow AROMAR 2018
- sprayer BIARDZKI 2016
- sprinkler IDROFOGLIA 2024
The farmer plans to regularly expand his beef cattle herd from 85 head to at least 100 head over the next 3 years. In addition, he plans to increase the sowing of potatoes and onions. The loan is to be used to buy as many beef cattle as possible.
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.
34 hectares of land are included in the Green Loan program. It is estimated that a total of 248 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 14000 EUR * 11% * 5 year = 7700 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): 12,95% IRR*
Today's scenario (€35 per carbon certificate): 20,68% IRR*
Optimistic scenario (€100 per carbon certificate): 46,34% 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.