October 23, 2023

photo credit: Conways Station website

By Lynda Kiernan-Stone, Global AgInvesting Media

Two major Australian entities have partnered to acquire a large-scale agricultural asset in the country’s Northern Territory through an off-market deal brokered by LAWD. Viridios Capital, a specialized climate change investment manager, and WealthCheck, an ag-focused investment and property manager, have partnered to acquire the 139,200-hectare (343,971-acre) Conways Station from Dajiang Li for A$20 million (US$12.65 million). 

Of this total consideration, A$14.5 million (US$9.17 million) was paid by the partners for the land and the balance was for the plant, equipment, and cattle, on a walk-in, walk-out basis. 

Bordering Arnhem Land and the Kakadu National Park, Conways sits southeast of Katherine, currently running 4,700 head of cattle and a large herd of wild buffalo that are professionally mustered and sold on both the domestic and exports markets. 

However, the partners have made the deal with an eye toward potential carbon project development as the asset presents an opportunity for significant ecosystem restoration following years of cattle grazing and the impacts that has wrought on wild buffalo populations. 

“We’re excited to be working with WealthCheck to develop a carbon project on Conways Station,“ said Eddie Listorti, CEO, Viridios Group. “After years of intense cattle grazing we see significant potential to restore this amazing land which borders some of Australia’s most iconic and biodiversity rich ecosystems.”

In October 2022, Australia’s green bank – the Clean Energy Finance Corporation (CEFC) – signaled to investors its strategic plan to “aggressively expand” into sustainable agriculture through partnerships with the country’s top asset managers.

This agenda had been reinforced and solidified by the ratification of the Climate Change Bill, which was passed by both Houses on September 8, 2022 and re-addresses and strengthens carbon emissions reduction goals on the part of the Australian government, easing the risk profile of such a decarbonization investment mandate. 

“As Australia’s ‘green bank’, the CEFC invests to catalyze private sector capital into clean energy and emissions reduction projects, fill market gaps and help develop new markets to drive decarbonization across the economy,” commented Ian Learmonth, CEO of CEFC, last year.

The partners outlined their intentions to develop a Human Induced Regeneration (HIR) and Integrated Farm and Land Management (IFLM) project on the property, along with the adoption of sustainable cattle grazing methodologies.  

An independent review of the country’s Carbon Credit Units (ACCUs) was commissioned earlier this year by the Australian government to address concerns that Australian carbon credits were not representative of actual results, and to ensure that the framework was aligned with its intended purpose. The partners explained that given the changes to the carbon market that have been implemented as a result of this review, demand for HIR carbon credits, which are expected to continue under the new IFLM framework, will continue to be strong. 

Data generated by Viridios has demonstrated that HIR credits trade at a significant premium to generic Australian Credit Carbon Units (ACCUs), with the latest information indicating that the market is willing to pay A$34.62 (US$21.89) for HIR ACCUs compared to A$31.50 (US$19.92) for generic credits. 

“As we head towards 2030, we expect the carbon credits we generate from this unique property in the Northern Territory will help satisfy the increasing demand for high quality ACCUs,” concluded Listorti.

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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