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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.
-3,199,920 kg CO2e
PL0002483
| Project owner | Address |
|---|---|
| header_1 | Declared | Owned |
|---|---|---|
| Farming land | 130.00 ha | 100.00 ha |
| 2023 | 2022 | |
|---|---|---|
| Revenue | 223,054.48 € | 144,997.59 € |
| Net profit | - | - |
| Equity ratio | - | - |
Documents
Payment schedule
About the farm
The farmer has been farming since 1990, having taken over 12 ha from his parents. Since then, he has managed to enlarge the farm to 130 ha, of which he owns 100 ha. On the farm he is involved in crop production, with a sowing structure of 30 grain maize , 40 rape , 15 triticale , 15 barley 30 wheat.
On the farm he uses machinery such as:
- ROSTSELMASH 2021 grain combine
- SULKY cultivator 2021
- FENDT 8018 Vario 2005 tractor
- FENDT 309 tractor 2010
- Deutz-Fahr Agrotron ttv tractor 2023
The farmer intends to increase his seed maize acreage to 50 ha and buy 10 to 15 ha over the next five years. In addition, he plans to purchase additional machinery to help drive sustainability, a spreader with navigation. Furthermore, he plans to replace the ternite on the roofs and modernise the buildings with a view to increasing grain storage. The loan proceeds are to be used to replace the roofs, buy a precision seeding machine and ongoing expenses.
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 1012 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 50000 EUR * 12% * 5 year = 30000 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): 12,44% IRR*
Today's scenario (€35 per carbon certificate): 20,1% IRR*
Optimistic scenario (€100 per carbon certificate): 46,13% 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.