Marsh’s insurance solution enables Chestnut Carbon to secure a $210 million landmark financing deal.
Microsoft commits to purchase 7 million tons of carbon removal credits to support its 2030 carbon-negative goal.
Project to restore 60,000 acres in the Southern U.S. and plant 35 million biodiverse trees, backed by first-of-its-kind project financing in the voluntary carbon market.
Marsh has placed a carbon credit insurance policy for Chestnut Carbon, a New York-based developer of nature-based carbon removal projects, helping secure a landmark $210 million non-recourse project finance facility led by J.P. Morgan. The policy, underwritten by London-based insurer CFC, protects against the risk of non-delivery of high-quality carbon removal credits under a long-term agreement with Microsoft.
Microsoft has committed to purchasing seven million tons of credits as part of its ambition to become carbon negative by 2030. The deal marks the first project financing of its kind in the voluntary carbon market and will support the acquisition and restoration of 60,000 acres across the Southern United States, including the planting of over 35 million native hardwood and softwood trees.
Amy Barnes, Head of Climate & Sustainability Strategy at Marsh, said: “Carbon removal credits have become increasingly important for organizations seeking to offset their emissions through tech or nature-based solutions. Working with CFC, we have been able to create an insurance solution that has not only facilitated Chestnut’s innovative financing but also underscores the critical role that insurance plays in building confidence in the voluntary carbon credit market, enabling the broader energy transition.”
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Greg Adams, CFO of Chestnut Carbon, added: “The availability of suitable carbon credit insurance is essential in supporting our non-recourse project financing. Akin to more traditional asset classes, a robust insurance package reinforces the bankability of our project and is catalytic for the maturation of the carbon market space more broadly. We are instilling further confidence in the future of the carbon removal credit market by building a sustainable financing model, of which insurance plays a key part, to help organizations like Microsoft meet their carbon negative goals.”
George Beattie, Head of Innovation at CFC, noted: “In a short timeframe, CFC has built a reputation for innovation in the context of carbon markets and associated risks. We exist to make deals happen and are excited about a future where blended finance, including insurance, facilitates an economic model for fighting the climate crisis that works for everyone.”
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