Can capital help solve climate change?

Thanks to Green Loans, a new Heavy Finance investment product, the answer is yes!

Green Loans allow you to provide financing for environmental solutions making a real positive change to our climate while making a great return on your investment. At HeavyFinance, we open the door for retail and institutional investors to the growing market of carbon certificates, offering an opportunity for a significant return with a significant impact. We encourage you to learn more about the potential of the carbon certificates market.

What are carbon certificates?

A carbon certificate is a unit of exchange that companies and organisations can use to offset their greenhouse gas emissions. One carbon certificate is equivalent to one metric ton of greenhouse gases removed from the atmosphere, and farmers engaged in no-till practice on average remove 2.3 tonnes of carbon dioxide per hectare from the atmosphere every year.

As the current market price of a single carbon certificate is within the range of 25 - 35 EUR, only one hectare of agricultural land with adopted no-till practice can generate 58 - 81 EUR per year.

As more and more companies are targeting zero net emissions goals, the demand and therefore the price of carbon certificates is expected to increase over time. Moreover, as all HeavyFinance sustainability projects are verifiable and accurately track their actual carbon dioxide sequestration, the quality of our carbon certificates can be sold at a market premium, further increasing the return on investment.

About the farm

As of 2019, the entrepreneur manages a crop farm of more than 157 hectares in the Širvintos district.

She currently sows oilseed rape and wheat, among other crops. The entrepreneur, who is committed to agricultural innovation, works her land in a bearimic way, which saves energy and increases the humus content of the soil.

The entrepreneur currently uses a tractor and other implements on her farm, all of which were purchased with funding from the European Union. The plan is now to purchase another tractor from the Netherlands, which is very much needed for the expanding farm. The farmer declares 157,09 ha and owns 7,20 ha, but the total family holding is over 900 ha in Širvintos district.

Main Terms

The principal will be repaid by the farmer in regular instalments over the span of 3 years in accordance with repayment schedule.

All 70 hectares of arable land are included in the Green Loan program. It is estimated that this farm will generate up to 515 carbon certificates in 4 years (based on a conservative estimation). Consequently, investors will additionally receive a portion of sales proceeds from every carbon certificate generated throughout the span of 4 years as the following terms;

• 60% of income share during the loan period
• 40% of income share for the following year after the loan period

It is expected that the first carbon certificates will be generated and sold in the first quarter of 2024. The exact return will depend on the amount of sequestered CO2 levels and the sale price of the carbon certificates.

If the farm withdraws from the Green Loan without a period of at least 4 years have elapsed, it undertakes to reimburse 12% annual interest.

CO2 emissions to be removed from the atmosphere because of this loan are equal to 2,1 million kilometres driven by an average gasoline-powered passenger vehicle.

Annualized return forecast

• Conservative scenario (€20 per carbon certificate): 17.3% IRR*
• Today's scenario (€35 per carbon certificate): 28.7% IRR*
• Optimistic scenario (€100 per carbon certificate): 70.3% 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.

Keep in mind that the return forecast is an estimation and does not guarantee you the returns mentioned above

Business information

Declared land, ha 157.09

Owned land, ha 7.20

Revenue 2022 €47 542

Revenue 2021 €49 101

Security measures

• Heavy equipment: Tractor Massey Ferguson 8670
• €97 000 
  
• VŠĮ Emprekis (a monthly publication that covers the average prices of used and naturally worn-out vehicles up to thirty years old. The company provides its services in Lithuania, Latvia, Estonia and Germany, and are also trusted by banks)
  

Personal liability of the project owner