SUBSCRIBE
PROFILE

Chestnut Carbon secures pioneering non-recourse financing of $210mn for afforestation in the U.S.

Chestnut Carbon has secured a non-recourse loan of $210mn led by J.P. Morgan, marking a significant step for afforestation project financing and the growth of the U.S. voluntary carbon market.

Share:

Subscribe for unlimited access to all energy sector news.

Over 150 multisector articles and analyses every week.

Your 1st year at 99 €*

then 199 €/year

SUBSCRIBE — 99 € for the 1st year

Create a free account to read this article

*renews at 199€/year, cancel anytime before renewal.

Chestnut Carbon, a developer specializing in nature-based carbon removal solutions, has completed a non-recourse financing deal of up to $210mn for an afforestation project in the U.S. voluntary carbon market. This financing, structured around a long-term carbon removal supply agreement with Microsoft Corporation, positions this deal as a first-of-its-kind asset class within the U.S. sector.

Leading financial and contractual partners

The credit is supported by a banking consortium that includes J.P. Morgan, CoBank, Bank of Montreal, and East West Bank. It relies on a long-term carbon credit purchase agreement signed earlier this year between Chestnut Carbon and Microsoft Corporation. This commitment provides stability and visibility for lenders, placing the transaction within a framework akin to the financing of large energy infrastructure projects.

This financing model draws on proven practices from the renewable energy sector, notably long-term power purchase agreements, credit discipline, and thorough risk analysis. Several advisory firms, including ERM, Marsh, McDermott Will & Emery, and Milbank, collaborated in developing the financial structure, highlighting the growing institutional interest in nature-based carbon removal credits.

Towards the institutionalization of the voluntary carbon market

For Chestnut Carbon, this deal provides significant financial resources to accelerate the development of its afforestation portfolio and expand its carbon removal capacity. It offers Microsoft Corporation a reliable source of carbon credits, thus supporting its long-term carbon neutrality goals.

The success of this transaction confirms the feasibility of structuring voluntary carbon removal assets according to banking standards, facilitating market access for new investors. This development could pave the way for more similar financings, promoting sector growth and scaling large-scale afforestation projects.

The introduction of a non-recourse model tailored to nature-based projects is attracting attention from investors and developers, seeing it as an opportunity to secure necessary funding for large-scale projects while meeting the growing demand for high-quality carbon credits from global companies.

  • Popular on energynews.pro
The United States Sanctions Greek Shipper for Iranian Oil Trafficking
Metacon confirms partial delivery and receives EUR 14.9 million
Soluna crosses one gigawatt milestone with two new data centres in Texas
California launches public tender for hydrogen transportation services
Canadian Utilities secures AUC approval for Yellowhead gas pipeline project
Verra and S&P Global Launch New Infrastructure to Boost Carbon Credit Markets
Verra and S&P Global Commodity Insights join forces to build a next-generation registry aimed at strengthening carbon market integration and enhancing transaction transparency.
Singapore and Thailand seal Article 6 deal for carbon credits
Singapore signs its first regional carbon credit agreement with Thailand, paving the way for new financial flows and stronger cooperation within ASEAN.
GIP Acquires 49.99% Stake in Eni CCUS Holding in Strategic Carbon Deal
Eni sells nearly half of Eni CCUS Holding to GIP, consolidating a structure dedicated to carbon capture and storage projects across Europe.
Funds Push European Carbon Positions to Highest Since April
Investors hold 28.9 million EUAs net long as of August 8, four-month record level. Prices stable around 71 euros despite divergent fundamentals.
Canada allocates $1.83 mn to TerraFixing to develop carbon capture
The federal government is funding an Ottawa-based company’s project to design a CO2 capture unit adapted to cold climates and integrated into a shipping container.
Fluenta equips Louisiana site with Bias-90 FlarePhase system for CO₂ measurement
Fluenta has completed the installation of its Bias-90 FlarePhase system at the Pelican Amine Treating Plant in Louisiana, marking progress in the measurement of flare gas flows with very high carbon dioxide concentrations.
Alberta carbon market plunges below 25 dollars amid persistent oversupply
Alberta carbon credits trade at 74% below federal price as inventory reaches three years of surplus, raising questions about regulatory equivalence before 2026 review.
UK ETS: Carbon Removals Market Faces Price and Supply Challenges
The integration of carbon capture credits into the British trading system by 2029 raises questions about the price gap with allowances and limited supply capacity.
Carbon Ridge installs first centrifugal carbon capture unit on board a Scorpio Tankers vessel
Carbon Ridge reaches a major milestone by deploying the first centrifugal carbon capture technology on a Scorpio Tankers oil tanker, alongside a new funding round exceeding $20mn.
Elimini and HOFOR sign an agreement for a large-scale BECCS project in Copenhagen
Elimini and HOFOR join forces to transform the AMV4 unit at Amagerværket with a BECCS project, aiming for large-scale CO₂ capture and the creation of certified carbon credits. —
Carbonova secures $3.20mn for a pilot carbon nanofiber unit in Calgary
Carbonova receives $3.20mn from the Advanced Materials Challenge programme to launch the first commercial demonstration unit for carbon nanofibers in Calgary, accelerating industrial development in advanced materials.
TotalEnergies invests in sustainable forestry management with NativState in the United States
TotalEnergies seals partnership with NativState to develop thirteen forestry management projects across 100,000 hectares, providing an economic alternative to intensive timber harvesting for hundreds of private landowners.
Drax strengthens its lead as the UK’s top carbon emitter in 2024
Drax’s generation site recorded a 16% rise in its emissions, consolidating its position as the UK’s main emitter, according to analysis published by think tank Ember.
Graphano Energy unveils an initial resource estimate for the Lac Saguay graphite deposit
Graphano Energy announces an initial mineral resource estimate for its Lac Saguay graphite properties in Québec, highlighting immediate development potential near major transport routes, supported by independent analyses.
Carbon2Nature and Uría Menéndez launch reforestation of 90 hectares in Salamanca
Carbon2Nature, a subsidiary of Iberdrola, partners with law firm Uría Menéndez on a 90-hectare reforestation project in Sierra de Francia, targeting carbon footprint compensation for the legal sector.
First commercial seaweed harvest completed in Dutch offshore wind farm
North Sea Farmers has carried out the very first commercial-scale seaweed harvest in an offshore wind farm, supported by funding from the Amazon Right Now climate fund.
NWF injects GBP 28.6 million into Peak Cluster project for CO₂ capture
The UK's National Wealth Fund participates in a GBP 59.6 million funding round to finance a CO₂ capture pipeline for the cement and lime industry, targeting a final investment decision by 2028.
Bayou Bend accelerates carbon storage on the US Gulf Coast
The Bayou Bend project, led by Chevron, Equinor, and TotalEnergies, aims to become a major hub for industrial carbon dioxide storage on the US Gulf Coast, with initial phases already completed.
Chloris Geospatial raises $8.5M to scale satellite-based forest carbon monitoring
US-based Chloris Geospatial has raised $8.5M from international investors to expand its satellite-based forest monitoring capabilities and strengthen its commercial position in Europe, addressing growing demand in the carbon market.
Ottawa injects CAD21.5mn ($15.8mn) into new carbon capture projects
The federal government is funding three carbon capture, utilisation and storage initiatives in Alberta, strengthening national energy competitiveness and preparing infrastructure aligned with long-term emission-reduction goals.

Log in to read this article

You'll also have access to a selection of our best content.

or

Go unlimited with our annual offer: €99 for the 1styear year, then € 199/year.

SUBSCRIBE - €99