HeavyFinance, a marketplace for agricultural industry climate tech investments in Europe, has launched Green Loans to aid regenerative farming practices and combat climate change. The platform aims to capitalize on the rapidly growing carbon credit market, offering a new debt instrument for both retail and institutional investors to generate returns from CO2 removal credits produced in European farmland.
Green Loans allow farmers to take out loans without having to pay any interest rates as returns for investors are generated from the sale of CO2 certificates. HeavyFinance estimates that it will facilitate €7-10 million of debt capital during the first year after the launch of Green Loans, offering high-quality carbon certificates for investors while supporting farmers with the mass adoption of regenerative practices to tackle climate change.
According to the quarterly greenhouse gas emissions in the EU report, the agricultural sector is the third-largest contributor to greenhouse gas emissions in Europe. Green Loans aim to support carbon farming, an innovative approach that seeks to reduce the amount of carbon dioxide entering the atmosphere by storing it within the soil, leading to increased yields.
The regenerative approach to farming is based on sustainable agricultural practices such as no-tillage, strip or minimal cultivation, crop rotation, and management of crop residues. This approach can help farmers improve their practices, reduce soil erosion, and increase resiliency to high temperatures, droughts, and floods.
According to Laimonas Noreika, the Founder of HeavyFinance, Green Loans is an innovative product that empowers both institutional investors and farmers to take a leading part in addressing climate change.. Following a successful seed round, HeavyFinance seeks to make a splash in the European market by providing impact investing options to support the removal of greenhouse gas emissions. The agricultural sector requires 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 that the benefits for farmers are clear, with the results of the triple bottom line becoming environmentally friendly, socially responsible, and economically viable. Better farming methods lead to decreased soil erosion and enhanced resilience against extreme temperatures, droughts, and floods.
HeavyFinance recently closed a €3 million funding round and plans to enroll over 150,000 hectares across Europe to generate carbon credits in countries such as Poland, Lithuania, and Bulgaria by the end of the year. Regenerative agriculture could remove 1 billion tons of carbon dioxide equivalent per year by 2050, according to a recent report by the Food and Land Use Coalition.
In conclusion, Green Loans can provide farmers with the financial resources to implement sustainable practices while providing investors with a return on investment. This program highlights the importance of investing in the agricultural industry to promote sustainable, low-carbon practices and combat climate change.
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