A recently executed project financing has become a blueprint for emerging voluntary carbon credits, according to two executives involved in the deal.

This summer, JP Morgan led a USD 210m project financing facility for a Chestnut Carbon afforestation project across nine states in the Southern US. JP Morgan’s co-head of infrastructure finance and advisory, Fuat Savas, and Greg Adams, CFO of Chestnut Carbon, touted the deal on Infralogic’s Crossroads podcast, with Savas noting that a 25-year offtake agreement with Microsoft made the deal “very strong and bankable.”

“I don’t think this will be our last carbon removal financing, and it definitely won’t be Chestnut’s last financing. I think we now have a blueprint for something that’s replicable and scalable,” said Savas.

“This is the most chatter about a USD 210m deal in the project finance space, in part, because it’s novel. Our hope collectively, together with Microsoft, is that this deal is not novel five years from now. It’ll just be another carbon credit project financing,” added Adams.

Launched in 2022 out of alternative asset manager Kimmeridge, Chestnut Carbon has two main business strategies: afforestation of land purchased by the company and forest management with third-party family forests and landowners.

Listen to the episode here.