Chestnut Carbon has closed a non-recourse project finance credit facility of up to $210 million, marking the first bank-led financing for a U.S. voluntary carbon removal afforestation project.
The financing was led by J.P. Morgan alongside a syndicate of major lenders including CoBank, Bank of Montreal, and East West Bank. The facility is underpinned by a long-term carbon removal offtake agreement signed earlier this year between Chestnut and Microsoft, one of the largest such agreements in the United States.
“This facility provides the capital to accelerate our afforestation and carbon removal initiatives, but it also establishes a replicable model for sustainable finance in the voluntary carbon sector,” said Greg Adams, Chief Financial Officer at Chestnut. “We believe this is transformative for Chestnut Carbon and for the industry as a whole.”
Modelled on traditional infrastructure financing approaches—such as those used in renewable energy—the structure brings credit discipline and scalability to the emerging nature-based carbon removal sector. The agreement demonstrates growing confidence among financial institutions in treating carbon removal projects as bankable assets.
Advisors involved in structuring the facility included ERM, Marsh, McDermott Will & Emery, and Milbank. The deal is expected to encourage wider institutional investment in the voluntary carbon market by proving that large-scale nature-based solutions can attract commercial finance.
“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 the Center for Carbon Transition at J.P. Morgan. “We’re proud to contribute to the growth of the carbon markets at large.”
For Chestnut, the financing supports expansion of its afforestation portfolio and carbon removal capacity. The project also contributes to Microsoft’s goal of becoming carbon negative, providing the company with long-term, verifiable carbon credits.
“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.”
