News provided by Chestnut Carbon
Jul 22, 2025, 07:20 ET
Led by J.P. Morgan, this facility represents a significant step towards scalability for nature-based carbon projects.
NEW YORK, July 22, 2025 /PRNewswire/ — Chestnut Carbon (“Chestnut”), a nature-based carbon removal developer, announced the successful closing of a landmark non-recourse project finance credit facility of up to $210,000,000—a first-of-its-kind bank financing for a U.S. voluntary carbon removal afforestation project.
Led by J.P. Morgan and a syndicate of leading lenders including CoBank, Bank of Montreal, and East West Bank, this transaction marks a pivotal step towards achieving increasing commercial scale for both the company and the broader voluntary carbon market and U.S. afforestation space.
This innovative credit facility uses the long-term carbon removal supply agreement executed earlier this year between Chestnut and Microsoft Corporation (“Microsoft”), which reflects one of the largest carbon removal agreements in the U.S. The success of the financing also demonstrates that this asset class can be structured as investable, bankable assets, like more established infrastructure classes.
“We are thrilled to have completed this first-of-a-kind transaction,” said Greg Adams, Chief Financial Officer at Chestnut. “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. We believe this is transformative for Chestnut Carbon and for the industry as a whole. We are grateful for the support of Microsoft, our lenders and our other partners who worked tirelessly to help make this possible.”
Setting a New Standard for Project Finance in the Voluntary Carbon Space
Drawing on elements from traditional sectors, most notably renewable power projects, the deal’s structure, underpinned by the long-term offtake contract with Microsoft, brings credit discipline, rigorous underwriting, and scalability to a relatively new asset class. Chestnut, Microsoft, and the lending syndicate collaborated with a strong team of advisors to adapt proven infrastructure finance frameworks for large-scale nature-based carbon removal. Advising firms included ERM, Marsh, McDermott Will & Emery, and Milbank. This alignment has produced a robust and scalable facility, with the potential to enable broader institutional investment and growth in the voluntary carbon market.
“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 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.”
Transformative Impact for Chestnut Carbon and the Market
Achieving commercial non-recourse financing represents a new benchmark in the voluntary carbon market, signaling growing confidence among lenders and introducing a broader investor base to project developers.
For Chestnut, the financing delivers the financial resources to expand its afforestation footprint and carbon removal capacity, supporting both climate and biodiversity goals while providing Microsoft with durable, high-integrity carbon credits to meet its carbon negative commitments.
Such financing has the potential to catalyse further innovation and investment—helping to accelerate the transition to a low-carbon economy.
“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. “We’re encouraged to see new financing models emerge that support the growth of durable carbon removal supply. Microsoft remains committed to advancing the voluntary carbon markets through long-term offtake agreements that help unlock investment and innovation.”
About Chestnut Carbon
Chestnut Carbon (“Chestnut”) is a leading developer of nature-based carbon removal credits. Founded in 2022 with the support of energy-focused alternative asset manager Kimmeridge, Chestnut generates high-quality U.S.-based forest carbon offsets that are additional and verifiable to accelerate the path to net zero across a range of industries. Chestnut uses a proprietary approach to developing forest carbon offset projects on family-owned forestland and marginal crop and pasture land. Chestnut’s expertise is driven by an experienced team, whose diverse backgrounds include forestry, carbon regulation, environment, finance and land management. For additional information on Chestnut, its strategies and environmental stewardship, please visit https://chestnutcarbon.com/.
SOURCE Chestnut Carbon