Public Commentary: The following reflects FG Capital’s view on AFOLU (Agriculture, Forestry & Other Land-Use) carbon projects. It is general information, not advice or a solicitation.
AFOLU Carbon Project Development & Financing—All Under One Roof
From scouting degraded pasture in Mato Grosso to closing a forward offtake with a Fortune 500 buyer, our boutique team handles every link in the AFOLU carbon chain. We bankroll early surveys, line up technical partners, lock in revenue through pre-sold credits, and place senior debt or equity with investors who actually understand tree-growth curves and monitoring hurdles. One shop, full cycle, zero hand-offs.
What We Do—Start to Finish
• Origination & Feasibility:
Land-tenure checks, baseline studies, leakage mapping, and free, prior & informed consent.
• Structuring & Capital Provision:
Development loans and risk-sharing equity; repayable from first credit issuances or exit to a yield vehicle.
• MRV & Certification Support:
Coordinate remote-sensing, on-ground sampling, and validator engagement under VCS, ART TREES or Gold Standard.
• Credit Monetisation:
Pre-issuance forwards, streaming contracts, auction placements, or spot sales once credits hit the registry.
• Lifecycle Oversight:
Cash-flow modelling, escrow management, biodiversity co-benefit tracking, and dispute resolution for 10–30-year project terms.
Who We Serve
• Project Sponsors:
Forestry operators, Indigenous cooperatives, restoration NGOs, ag-tech scale-ups.
• Corporate Offtakers:
Hard-to-abate industrials, aviation majors, consumer-goods giants chasing SBTi pathways.
• Capital Providers:
Impact debt funds, carbon-streaming firms, pension shops hungry for nature-linked yield.
• Public Stakeholders:
Provincial governments seeking jurisdictional REDD+ alignment and revenue-sharing.
Why We’re Built for This
Traditional lenders shy away until credits show up on a registry—way too late for sponsors who need seed money to drill soil cores or hire community liaisons. Consultants can draft a PDD but stop short of wiring cash. We knit the two worlds together: advisory brains plus a balance sheet willing to risk early capital. Our fees ride on credit success, and senior staff keep personal funds in the game, so incentives stay glued to outcomes.
The Opportunity—Straight Numbers
• Demand Spike:
Voluntary carbon retirements blew past 230 MtCO 2
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in 2024 and the queue keeps growing.
• Shortage of High-Integrity Supply:
Less than 15 % of credits issued last year met top-tier quality screens.
• Price Gap:
Ex-ante AFOLU forwards averaged USD 12/t; high-quality spot trades cleared north of USD 30/t—margin worth capturing.
• Compliance Tailwind:
CORSIA, EU CBAM offsets, and emerging Article 6 trades will drag voluntary prices higher.
How We Structure the Capital Stack
| Tranche | Collateral / Security | Typical Cost | Investor Profile |
|---|---|---|---|
| Senior Secured Loan | Pledge over project SPV shares, escrowed credit revenue | SOFR + 550–700 bps | Impact & private-credit funds |
| Mezzanine Note | Second-ranking claim, upside kicker tied to credit price | 12–15 % cash pay + bonus | Family offices, carbon streaming vehicles |
| Developer Equity | Residual cash flows plus any premium on exit | Target 20 %+ IRR | Project sponsors, strategic corporates |
| Advance Purchase Agreement | First call on issued credits at fixed price | Pre-pay of USD 8–15/t | Corporate offtakers, ESG desks |
Who Writes the Cheques?
- Impact-Driven Debt Funds chase measurable climate outcomes plus floating-rate spread.
- Carbon Streaming & Royalty Firms pre-purchase credits at a discount for resale upside.
- Pension & Insurance Pools tap long-dated, nature-linked yield that matches liability profiles.
- Development Finance Agencies de-risk frontier-market forestry with blended-finance cushions.
Need AFOLU Carbon Finance?
Whether you’re planting trees, restoring mangroves, or reshaping soil-management on vast ranchlands, drop us a line. We’re up for a straight talk on structure, risk, and cash flow—no fluff.
This post is informational only. It is not investment advice, an offer to sell, or a solicitation to buy any security or instrument. All transactions remain subject to detailed due-diligence and local regulation.
