$210M project finance facility secured for U.S. afforestation, a first for the voluntary carbon market
Backed by Microsoft’s 25-year carbon removal offtake from Chestnut Carbon
Structured by J.P. Morgan and lender syndicate to bring infrastructure-scale financing to carbon projects
Microsoft and J.P. Morgan are powering a breakthrough in climate finance. Nature-based carbon removal startup Chestnut Carbon has secured a $210 million non-recourse project finance credit facility — the first of its kind in the U.S. voluntary carbon market — to scale large-scale afforestation projects.
The deal is anchored by Microsoft’s 25-year agreement to offtake more than 7 million tons of carbon credits from Chestnut’s Southern U.S. forest projects, marking one of the largest corporate carbon removal contracts in the country.
“We’re encouraged to see new financing models emerge that support the growth of durable carbon removal supply,” said Brian Marrs, Senior Director of Energy & Carbon Removal at Microsoft.
A first for afforestation finance
Led by J.P. Morgan and supported by CoBank, Bank of Montreal, and East West Bank, the facility introduces project finance discipline to carbon removal — enabling bankable, investable deals similar to those in renewable energy.
“Providing this kind of financing gives developers the runway they need to succeed at an attractive cost of capital,” said Vijnan Batchu, Global Head of the Center for Carbon Transition at J.P. Morgan.
Chestnut’s model involves acquiring marginal land, restoring biodiverse forests, and generating high-integrity carbon removal credits — aiming for 100M tonnes removed by 2030.
RELATED ARTICLE: Nasdaq Unveils Carbon Academy to Educate Market on Carbon Removal Strategies
“This establishes a replicable model for sustainable finance in the voluntary carbon sector,” said Greg Adams, CFO of Chestnut Carbon.
Why it matters
This deal signals a shift toward institutional-grade finance for nature-based carbon removal and opens the door to mainstream capital.
“If this is one and done and it’s not replicable, then we’ve all failed,” said Adams. “This needs to be the first of many.”
Follow ESG News on LinkedIn
