$210M credit facility marks one of the first large-scale project finance deals in the voluntary carbon market.
Funding will accelerate Chestnut Carbon’s afforestation projects, backed by Microsoft’s 25-year, 7M-ton carbon credit offtake.
Model could lower capital costs for carbon project developers and attract broader investor participation.
J.P. Morgan has arranged a $210 million credit facility for U.S.-based Chestnut Carbon, signaling a major step forward in financing nature-based carbon removal projects at scale. The deal, underpinned by one of the largest carbon removal offtake agreements in the country, could set a precedent for reducing capital costs for carbon developers.
“Not only does this facility provide the capital to accelerate our afforestation and carbon removal initiatives, it also establishes a replicable model for sustainable finance in the voluntary carbon sector,” said Greg Adams, chief financial officer at Chestnut. “We believe this is transformative for Chestnut Carbon and for the industry as a whole.”
The facility represents one of the first large-scale uses of commercial project finance in the voluntary carbon market. With long-term supply contracts like Chestnut’s, large-scale afforestation initiatives can now be structured as investable, bankable assets.
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“Providing this kind of financing gives developers the runway they need to succeed at an attractive cost of capital, allowing them to focus on delivering significant carbon projects and fulfilling contracts,” said Vijnan Batchu, global head of the Center for Carbon Transition at J.P. Morgan.
Chestnut develops afforestation projects by planting native trees on unused farmland across the southeastern U.S., including Alabama, Arkansas, Mississippi and Louisiana. In January, the company announced a 25-year agreement with Microsoft to deliver over 7 million tons of carbon removal credits, restoring approximately 60,000 acres and planting more than 35 million native trees. This offtake agreement formed the basis for the J.P. Morgan-led financing.
The transaction underscores how innovative financing structures could scale nature-based carbon removals, diversify investor interest, and strengthen the voluntary carbon market as a tool for supporting the low-carbon transition.
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