HeavyFinance, a European climate tech investment marketplace for the agricultural industry, has launched Green Loans as an entry point to the carbon credit market.
This debt instrument enables retail and institutional investors to get returns from the sale of CO2 removal credits generated in European farmland.
HeavyFinance stated that as the need to take action on climate change increases and demand for voluntary carbon credit increases, investors in Green Loans can earn up to 30% annual returns with an investment period of four 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.
The FinTech company expects to facilitate €7m-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.
These regenerative practices are based on sustainable agricultural practices such as no-tillage, strip or minimal cultivation, as well as crop rotation and management of crop residues. The Food and Land Use Coalition claims regenerative agriculture could remove one billion tons of carbon dioxide equivalent per year by 2050.
HeavyFinance founder Laimonas Noreika 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.”
HeavyFinance aims to tackle the climate crisis through financing and loan schemes for companies in the sustainable agriculture space.
The company recently raised €3m in its seed funding round, which was led by Lithuanian venture capital firm Practica Capital.
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