Key Impact Points:
- Historic Financing Milestone: Chestnut Carbon closed a $210M non-recourse project finance facility—the first of its kind for a U.S. voluntary carbon removal afforestation project.
- Microsoft Partnership as Catalyst: The deal is underpinned by a major long-term carbon removal agreement with Microsoft, helping transform carbon credits into bankable, investable assets.
- Model for Market Replication: Led by J.P. Morgan, the structure adapts proven infrastructure finance frameworks to unlock broader institutional investment in nature-based carbon removal.
Landmark Financing Ushers in Scalable Nature-Based Carbon Projects
Chestnut Carbon has announced the closing of a groundbreaking $210 million non-recourse credit facility—the first bank financing of its kind for a U.S. afforestation project in the voluntary carbon market.
The transaction, led by J.P. Morgan with syndicate partners CoBank, Bank of Montreal, and East West Bank, signals a new chapter in sustainable finance. It uses a long-term carbon removal offtake agreement with Microsoft, signed earlier this year, to back the financing.
“We are thrilled to have completed this first-of-a-kind transaction,” said Greg Adams, CFO of Chestnut Carbon.
“Not only does this facility provide the capital to accelerate our afforestation and carbon removal initiatives, but it establishes a replicable model for sustainable finance in the voluntary carbon sector.”
Proven Project Finance Structures Meet Emerging Carbon Markets
The facility adapts traditional infrastructure finance methods—common in renewable energy—to a new asset class: large-scale, nature-based carbon removal.
The deal structure is rooted in credit discipline and long-term offtake certainty, giving developers confidence and investors a bankable asset.
“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 Center for Carbon Transition at J.P. Morgan.
“J.P. Morgan is extremely proud to be a part of this significant deal and contribute to the growth of the carbon markets at large.”
Advisors on the transaction included ERM, Marsh, McDermott Will & Emery, and Milbank, who collectively enabled a scalable structure designed for institutional uptake.
A Market-Shifting Moment for Climate Finance
The deal not only delivers for Chestnut’s expansion but sets precedent for financing nature-based carbon solutions at commercial scale. The model introduces a broader investor base to a maturing voluntary carbon market.
“This transaction marks a meaningful step forward in demonstrating how nature-based carbon removal can scale through structured, high-integrity financing,” said Brian Marrs, Senior Director of Energy & Carbon Removal at Microsoft.
“Microsoft remains committed to advancing the voluntary carbon markets through long-term offtake agreements that help unlock investment and innovation.”
Related Content: Chestnut Carbon Restores 30K Acres with 17M Trees in Largest U.S. Afforestation Project
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