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In a landmark move for climate finance, Chestnut Carbon, a U.S.-based nature-based carbon removal startup, has secured a $210 million non-recourse project finance facility to accelerate large-scale afforestation efforts. The deal marks the first infrastructure-style financing in the U.S. voluntary carbon market.
The facility is anchored by Microsoft’s 25-year offtake agreement, under which the tech giant will purchase over 7 million tons of carbon removal credits from Chestnut’s forest restoration projects in the Southern United States. This long-term commitment is one of the largest corporate carbon removal contracts in the country and provides the financial backbone for the transaction.
Structured by J.P. Morgan, with participation from CoBank, Bank of Montreal, and East West Bank, the financing introduces traditional project finance discipline to carbon removal, enabling bankable, scalable investments akin to those in renewable energy.
Chestnut’s model centers on acquiring marginal agricultural land, restoring biodiverse forests, and generating high-integrity carbon credits. The company has already planted over 17 million trees since 2022 and aims to remove 100 million tonnes of CO₂ by 2030.
“This facility 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. Greg Adams, CFO of Chestnut Carbon, added, “This establishes a replicable model for sustainable finance in the voluntary carbon sector”.
The transaction signals a broader shift toward institutional-grade financing for nature-based solutions, unlocking access to mainstream capital and setting a precedent for future climate-focused investments.
You can read the full announcement on ESG News.
Top of JPMorgan Chase Tower Dallas Texas On Wikimedia by Joe Mabe
