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.
-7,071,823 kg CO2e

PL0002613

Goal
116,660 €
Raised
116,660 €
100%
Return rate
22%
Rating
A+
Period
36
Time left
LTV
57%
Country
Poland
Loan purpose
Equipment purchase
Business information
Security measures
Loan history
Project owner Address
Xxxxxx Xxxxxx Xxx
Xxxxxxx 7, 66-120 Xxxxxxx
header_1 Declared Owned
Farming land123.68 ha22.12 ha
20242023
Revenue 1,689,321.00 € 1,357,035.00 €
Net profit - -
Equity ratio - -
Project description
Documents
Payment schedule

About the farm

The farm has been operated since 1995 through the purchase of 28ha of land from an agricultural real estate agency. Currently, the farm's acreage is 776ha of which 28ha is owned by him. The farm employs 19 workers. The farm specializes in crop production and pig breeding. The sowing structure consists of 165ha of potatoes, 61ha of onions, 105ha of corn, 162ha of wheat, 154ha of rapeseed and 95ha of barley. Pig breeding is about 9500 head per year.

The farm has a number of machines such as:


  • HUSARYA stone harvesting machine 2019
  • JVS front-end loader 2020
  • GRIMME combine harvester 2020
  • CLAAS combine harvester 2022
  • SUP-15 grain dryer 2022
  • MASCHO GASPARDO sprayer 2021
  • PICHON manure spreader 2022

The farm plans to sell vegetables directly to markets to get a higher margin. In order to cooperate with the markets, it is necessary to pack vegetables in individual packages instead of bulk, i.e. in bulk. In order to do so, it is necessary to invest in machinery on the farm. It is also in the process of applying for cooperation with Dino store chains. One of the next conditions for cooperation is to have the necessary infrastructure to guarantee delivery of the products offered. Hence the need for investment. The increase in projected revenues after the investment is more than 2.3 million euros, and the profit is about 180 thousand euros per year. 

The loan funds will help the farm to purchase 3 machines: 
1) Automatic palletizer, WiBo8 2024
2) Optical sorter, R270 M 2024
3) Line for preparing vegetables for sale to markets LP05899/11/23 2023

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.

221 hectares of land are included in the Green Loan program. It is estimated that a total of 1788 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 116660 EUR * 9,5% * 4 year = 44330,8 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): 14% IRR*
Today's scenario (€35 per carbon certificate): 22,31% IRR*
Optimistic scenario (€100 per carbon certificate): 49,74% 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.