Arbonics, a climate tech startup, and Swedbank, a leading bank in the Nordic and Baltic region, launch a partnership to offer financing for planting new forests. This first of its kind offering will help landowners cover the upfront costs of trees and planting for afforestation, and earn extra income from carbon credits.
Arbonics, a climate tech startup, and Swedbank, the leading bank in the Nordic and Baltic region, have partnered to launch an innovative afforestation loan for landowners. The loan is designed to support the planting of new forests and, starting today, will initially be offered to landowners in Estonia and Latvia.
Under the partnership, Arbonics will provide landowners with a sustainability assessment, which is necessary for their loan application. Swedbank, in turn, will offer financing for the establishment of a new forest on better terms because the activity adheres to EU Taxonomy Regulation. Landowners will have access to affordable financing for afforestation, enabling them to plant new forests and contribute to climate change mitigation.
Afforestation is the process of planting on land not previously forested, including low quality agricultural soils and abandoned land. Establishing new forests creates additional nature-based carbon sequestration, which also gives landowners the opportunity to participate in the voluntary carbon market, allowing them to earn additional income from carbon credits.
In the Baltics, saplings and planting can cost up to 2000 EUR per hectare, which is a significant upfront cost for landowners who are considering afforestation. The loan will provide an option for financing this planting cost and spreading it over a longer period. The first step for landowners is to check their eligibility with Arbonics by undergoing a carbon opportunity analysis. For this analysis, Arbonics uses a proprietary data-based tool that takes into account dozens of data sources. In addition to checking the suitability of the land for afforestation, it also provides an initial estimate of income from selling carbon credits. Based on the analysis, Swedbank can process the afforestation loan application.
Kristjan Lepik, Co-founder, Arbonics: “As we stand on the precipice of a new era, one where finance becomes a powerful tool in the fight against climate change, we are thrilled to announce this afforestation loan with Swedbank. This is not just about offering better loan terms; it's about forging a path to a greener future. This partnership embodies a significant shift in the banking sector, moving towards scientifically validated, climate-friendly loans that align with the European Commission's push for sustainable finance.”
Artur Leemet, Head of Sales and Partnership, Swedbank Baltics: “Increasing forested areas is one of the most effective natural ways to reduce climate impact. By introducing the afforestation loan, which is prepared taking into account the requirements of the EU Taxonomy, we want to encourage the Baltic countries businesses to reduce their impact on the environment in this way and contribute to the common goal of becoming a climate-neutral economy.”