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This white paper from CFP Energy and Ara Partners draws on the Vaulted Deep transaction to show how carbon removal projects can secure mainstream bank finance.

Carbon removal is moving from proving its technology to financing its growth.

That shift brings challenges and opportunities for developers, buyers and investors across the voluntary carbon market.

Around 50.5 million tonnes of durable carbon removal have been contracted worldwide, but only 1.7 million tonnes have been delivered. The gap is not a lack of demand. Developers can’t build fast enough on grants and equity alone.

Using the US$35 million debt facility CFP Energy arranged for Vaulted Deep with Mediobanca as a case study, the paper sets out how long-term offtake agreements, insurance and careful deal structuring can turn future carbon revenue into something a bank will lend against.

 

Developers that design their projects with lenders in mind could reach cheaper, repeatable capital sooner, while those that leave it late risk stalling just as demand grows.

The paper also offers a practical framework of five pillars of bankability, and a blueprint for applying them across technologies, developer types and stages of growth. It shows how the market can move from one-off deals to infrastructure-scale finance.

 

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Tyler Manchester

Head of Voluntary Carbon, CFP Energy

 

“We’ve been looking at carbon project investments as a firm for about 20 years, through different iterations of the market. What we realised was that the investments we were making didn’t necessarily match the stage of the market, or the stage of the project, in order to scale.

 

Projects that are operational, performing and already delivering need cheaper capital in order to scale and deliver into substantial offtake agreements.

 

We set out to create a financing product that would enable carbon projects to scale individually, while allowing new capital to flow into the market so the market as a whole can grow to the level it needs to be.”


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A comprehensive analysis of the voluntary carbon market

 

Demand for durable carbon removal has never been stronger, but only around 3% of contracted tonnes have been delivered. This paper sets out why, from how the voluntary carbon market has traditionally worked to the risks that keep lenders on the sidelines.

See where the capital gap sits, who is buying, and what developers need to show before a bank will lend.

 

And the solutions driving its evolution

 

Go inside the US$35 million Vaulted Deep debt facility, arranged by CFP Energy with Mediobanca and Artio, and see how long-term offtake agreements, insurance and careful structuring turned future carbon revenue into something a mainstream bank would lend against.

Use our five pillars of bankability to test your own project, find where it is weakest, and see the steps that can open up cheaper, repeatable capital at every stage of growth.

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