$1M USDA Grant Awarded to The Climate Trust to Build Conservation Investment Fund
In Washington, the Climate Trust received a $1 million Conservation Innovation Grant from the United States Department of Agriculture (USDA) to launch their inaugural investment fund; structured to provide carbon finance to biogas, forestry and grassland conservation projects. To leverage this support, The Climate Trust is now raising private capital and preparing a pipeline of innovative projects for investment.
The Climate Trust’s research has found that upfront financing is vital to build infrastructure, acquire property, compensate landowners for easements and encumbrances—and to then develop the carbon offset project through listing, monitoring, verification, registration, issuance, and credit sales. Traditional investors and lenders are reluctant to provide this upfront financing because it depends upon the sale of credits from the nascent carbon market. In practice, this means lenders do not value potential revenues from carbon markets and require projects to be profitable in their absence.
Thanks to the USDA grant, The Climate Trust will be launching a climate investment fund to change this paradigm; actively raising at least $4 million in private capital to invest in projects based on the anticipated value of the carbon credits they will generate. As a result, a new source of patient capital will be available to farmers, ranchers, and forest owners to adopt innovative conservation practices. A successful climate investment fund will demonstrate to private capital markets that emerging environmental markets can be relied upon to finance projects.
Category: Fuels
