March 19, 2024

By Lynda Kiernan-Stone, Global AgInvesting Media

Based in Lithuania, HeavyFinance operates as a connecting investor with European farmers in need of external funding for the expansion of their operations and shift to regenerative production. 

With the goal of removing one gigaton of CO2 emissions through ag financing, to-date, the team has facilitated financial support for more than 1,700 agricultural ventures in Bulgaria, Latvia, Lithuania, Poland, and Portugal. And they’re not stopping there.

HeavyFinance is currently raising €50 million (US$54.3 million) for a private credit fund that will support European small and medium-sized (SMEs) businesses with bespoke finance solutions that advance on-farm decarbonization and greener farming practices across the five aforementioned countries. 

The EU has recognized soil for its outsized ability to be a carbon sink, and the agricultural industry as being key to achieving climate neutrality by 2050. This new fund aims to remove 0.376 tons of CO2 equivalent for every €1,000 invested (US$1,086), aligning with the EIF’s Climate Action and Environmental Sustainability guidelines. 

Launched in 2020, HeavyFinance has taken more than 10,000 soil samples to help measure carbon storage on farmland, and has already deployed more than €50 million (US$54.3 million) in agricultural loans to promote sustainable practices, modernize equipment, and increase working capital in agriculture. 

This newest fund is anchored by a €20 million (US$21.7 million) cornerstone commitment made by the European Investment Fund (EIF) that will not only bolster the fund in its efforts, but will act to attract capital from additional public and private investors. 

The agreement was made possible with the support of the InvestEU program, which has a goal to trigger more than €372 billion (US$404 billion) in additional investment between 2021-2027 for EU policy priorities, including the green and digital transitions. 

“Small and medium-sized businesses are the backbone of Europe’s economy. They are simultaneously affected by climate change and play a vital role in addressing it,” said Paolo Gentiloni, commissioner for the economy. 

“Thanks to the InvestEU program, we will provide SMEs active in agriculture with the finance they need to work towards decarbonisation. The support will help them for instance to upgrade their equipment and expand working capital. This, in turn, will enable growth and job creation. I am delighted that companies in Bulgaria, Latvia, Lithuania, Poland, and Portugal will be supported by this agreement.”

Over the course of its existence, this fund will provide mid-term debt capital for agricultural SMEs to support their efforts to reduce their carbon footprint through soil-friendly techniques that sequester carbon, such as no-till farming, a reduced reliance on synthetic fertilizers, and the use of less polluting farm equipment. 

“Farmers are facing unprecedented challenges due to climate change, but they are also at the forefront of finding innovative nature-based solutions,” said Laimonas Noreika, CEO, HeavyFinance.

“This fund represents a crucial step in HeavyFinance’s commitment to eliminating one gigaton of carbon dioxide from the atmosphere by 2050.”

“HeavyFinance is empowering European farmers to cultivate a more sustainable future,” added Marjut Falkstedt, chief executive, EIF. “With the support of the EIF and InvestEU, we are nurturing the growth of regenerative agriculture, contributing to decarbonization, unlocking the potential of our land and fostering a more resilient planet.”

~ 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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