HeavyFinance launched Green Loans to generate carbon credits in European agricultural land
HeavyFinance, a European climate tech investment marketplace for the agricultural industry, has launched Green Loans to tap into a rapidly growing carbon credit market.
This new debt instrument enables both retail and institutional investors to get returns from the sale of CO2 removal credits generated in European farmland. With the urgent need to take an action on climate change and the high demand on the voluntary carbon credit market, investors in Green Loans can now expect up to 30% annual returns with an investment period of 4 years.
With this financial product, farmers taking a Green Loan do not pay an interest rate, as returns for investors are generated from the sale of CO2 certificates.
HeavyFinance estimate to facilitate €7-10m of debt capital during the first year after the launch of Green Loans, providing high-quality carbon certificates for investors while supporting farmers with the mass adoption of regenerative practices to tackle climate change.
Laimonas Noreika, founder of HeavyFinance, said: “Green Loans is an exciting new offering, supporting institutional investors and farmers alike to play a central role in tackling climate change. Following our successful seed round, we are keen to make a splash in the European market, offering impact investing options to support the removal of greenhouse gas emissions. The agricultural sector has an important role to play in combating climate issues, requiring a unified effort from those within, and investing in, the industry to promote sustainable, low-carbon practices such as no-till farming across Europe.”
Violeta Gevorkjan, decarbonisation and sustainability expert at HeavyFinance, added: “Benefits for farmers are clear in terms of the results of the triple bottom line becoming environmentally friendly, socially responsible, and economically viable. Improved practices reduce soil erosion and increase resiliency to high temperatures, droughts, and floods”.
The programme represents a solution to the agriculture sector being labelled the third largest contributor to greenhouse gas emissions in Europe, according to the quarterly greenhouse gas emissions in the EU report.
Green Loans was set up to support carbon farming – an innovative approach aimed at reducing the amount of carbon dioxide entering the atmosphere by storing it within the soil, in turn leading to increased yields.
This regenerative approach to farming is based on sustainable agricultural practices such as no-tillage, strip or minimal cultivation, as well as crop rotation and management of crop residues, and according to a recent report by the Food and Land Use Coalition, regenerative agriculture could remove 1 billion tons of carbon dioxide equivalent per year by 2050.
HeavyFinance has recently closed a €3m funding round and plans to enrol over 150,000 hectares across Europe to generate carbon credits in countries such as Poland, Lithuania and Bulgaria by the end of the year.