Public Commentary: The following overview outlines FG Capital’s approach to financing and structuring projects issuing Verified Carbon Units (VCUs) and Voluntary Emission Reductions (VERs). It is provided solely for informational purposes and does not constitute investment advice or a solicitation.
VCU & VER Structuring – Verified Carbon Unit & Emission Reduction Finance
The voluntary carbon market rewards projects that meet rigorous standards for additionality, permanence, and robust Monitoring, Reporting & Verification (MRV). Securing premium pricing for VCUs and VERs requires meticulous methodology selection, airtight legal frameworks, and well-structured offtake agreements. FG Capital delivers comprehensive advisory, tailored financing, and reliable market access to optimise revenue and minimise execution risk for credit-generating projects worldwide.
Our Service Pillars
• Methodology Alignment:
Selecting Verra, Gold Standard, ACR, or ART pathways that maximise credit yield and buyer acceptance.
• Eligibility & Additionality Testing:
Financial-additionality modelling, leakage assessment, and stakeholder consultations.
• Capital Structuring:
Senior green loans, subordinated facilities, streaming agreements, and forward credit purchases aligned with issuance schedules.
• MRV System Design:
Digital-data architecture, QA/QC protocols, and audit-readiness support.
• Credit Placement:
Long-term offtake contracts, auction facilitation, and spot-market execution.
Engagement Framework
1 | Feasibility & Gap Analysis
• Baseline emissions modelling, financial-additionality appraisal, and eligibility screening.
2 | Financing Plan
• Capital-stack design balancing debt, equity, and advance credit sales to optimise cost of capital.
3 | Implementation Oversight
• EPC diligence, construction monitoring, and operational-risk mitigation.
4 | MRV & Verification Management
• Data-collection systems, pre-audit quality checks, and VVB coordination.
5 | Credit Monetisation
• Structured offtake, registry transfers, and secondary-market support.
Indicative Financial Benchmarks
| Project Category | Forward Price (USD / t) | Senior Debt Margin* | Target Equity IRR |
|---|---|---|---|
| Renewable Energy | 8 – 12 | SOFR + 250 – 325 bps | 11 % – 15 % |
| Methane Abatement | 9 – 13 | SOFR + 275 – 350 bps | 12 % – 16 % |
| Nature-Based (REDD+, ARR) | 14 – 20 | SOFR + 275 – 350 bps | 14 % – 18 % |
| Removal (Biochar, DAC) | 80 – 150 | SOFR + 300 – 375 bps | 15 % – 20 % |
*Indicative spread for limited-recourse senior debt with 10- to 12-year tenor.
Representative Capital Stack
| Tier | Security Package | Cost of Capital | Common Providers |
|---|---|---|---|
| Senior Green Loan | Pledge over assets and credit proceeds | SOFR + 250 – 350 bps | Infrastructure lenders, multilateral banks |
| Subordinated Facility | Second lien; cash-sweep covenant | SOFR + 425 – 600 bps | Private credit funds |
| Advance Credit Purchase | Delivery contract; make-good provisions | Fixed price per category above | Corporate buyers, brokered pools |
| Sponsor Equity | Residual cash flow | Target IRR per category above | Project developers, strategic investors |
Stakeholder Benefits
- Project Sponsors: Optimised capital costs and accelerated credit issuance.
- Credit Purchasers: Access to high-integrity units with transparent provenance.
- Investors: Predictable cash flows underpinned by long-term offtake demand.
- Regulators & Communities: Verified climate impact and robust safeguards against double counting.
Engagement
Developers and financiers seeking to optimise VCU or VER issuance are invited to consult with our advisory team. We would be pleased to discuss methodology alignment, financing pathways, and strategic credit-placement options.
This document is provided solely for informational purposes. It does not constitute investment advice and should not be interpreted as an offer to buy or sell any security, financial instrument, or service. Independent professional guidance is advised before acting on any information contained herein.
