ERM has acted as technical advisor to the lenders on a landmark financing for nature-based carbon removal developer Chestnut Carbon. The non-recourse project finance credit facility of up to $210 million is a first-of-its-kind bank financing for a U.S. voluntary carbon afforestation initiative.

On behalf of the lenders, ERM provided comprehensive due diligence services to assess and mitigate project risks across technical and operational dimensions. Its assessment included evaluation of:

  • Project registration, validation, and verification timelines
  • Supply chain management, including seedling sourcing and land acquisition
  • Alignment with ICVCM Core Carbon Principles and voluntary carbon market standards
  • Ecological design, biodiversity impacts, and species selection
  • Community engagement and benefit-sharing
  • Adherence to foundational carbon principles such as additionality and permanence

Led by J.P. Morgan and a syndicate of financial institutions, the transaction is underpinned by a long-term carbon removal supply agreement between Chestnut Carbon and Microsoft, one of the largest carbon removal agreements in the U.S. to date.

Greg Adams, Chief Financial Officer at Chestnut said: "This project's first-of-its-kind structure aims to create a bankable new asset class which leverages conventional frameworks to catalyze mainstream financing for nature-based climate solutions nationwide.

“Together, Chestnut and its partners seek to establish a transformative yet sustainable finance model, which is essential in enabling the industry to obtain long-term, competitively priced capital support that it needs to succeed and grow. It’s been a pleasure to work with ERM, a diligent, fair, and constructive partner who will continue to play an important role in our work as we continue to scale."

Rayna Stern, Partner at ERM said: “This transaction sets a new precedent for sustainable finance in the voluntary carbon market. We are proud to have played a role in supporting a scalable afforestation project that is designed to deliver positive biodiversity and climate impacts.”

About ERM

Sustainability is our business.

As the world’s largest specialist sustainability consultancy, ERM partners with clients to operationalize sustainability at pace and scale, deploying a unique combination of strategic transformation and technical delivery capabilities. This approach helps clients to accelerate the integration of sustainability at every level of their business.

With more than 50 years of experience, ERM’s diverse team of 8000+ experts in 40 countries and territories helps clients create innovative solutions to their sustainability challenges, unlocking commercial opportunities that meet the needs of today while preserving opportunity for future generations.  Learn more here.