Green loan

About the farm

The farmer has been farming since 2011, when he took over 21ha from his father, and has since expanded his farm to 65ha, of which he owns 42ha. On the farm, he is involved in crop production. He works independently. His sowing structure consists of 14ha of rapeseed, 5ha of corn and the rest is wheat.

On the farm he uses machinery such as:

• tractor JOHN DEERE 2023
• harvester JOHN DEERE 2015
• tractor NEW HOLLAND 2013
• spreader KVERNELAND 2022
• seed drill AMAZONE 2021

Over the next three years, the farmer plans to regularly buy new machinery to work with, and has plans to install a GPS system in one of his tractors. In addition, he plans to expand the acreage by at least 20 ha this year. The loan is to be used to refinance loans from HF and purchase additional land.

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.

65 hectares of land are included in the Green Loan program. It is estimated that a total of 470 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 21000 EUR * 12% * 5 year = 12600 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): 13,51% IRR*

Today's scenario (€35 per carbon certificate): 21,6% IRR*

Optimistic scenario (€100 per carbon certificate): 48,47% 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.