Kasey Krifka, The Climate Trust
Live on P.R. Web – July 19, 2017
U.S.-based private investment fund Climate Trust Capital, an independent entity of the long-standing mission-driven nonprofit The Climate Trust, has reached agreement on its inaugural forestry carbon investment. This $550,000 upfront investment is the second of Climate Trust Capital’s $5.5 million Fund Iaunched in October 2016, and was seeded by a Program-Related Investment from the David and Lucile Packard Foundation and supported by a Conservation Innovation Grant from the USDA’s Natural Resources Conservation Service.
The investment is an eleven-year commitment to invest in carbon offsets from a 6,000-acre forestry project with Connecticut-based Great Mountain Forest Corporation (GMF), a not-for-profit 501(c)3 private operating foundation. GMF, with a mission to educate, conserve and support scientific research of its forest areas, is contracting with experienced carbon offset project developer, Bluesource, LLC, to develop an Improved Forest Management project using an upfront investment from Climate Trust Capital’s Fund I. This deployment of capital to GMF from the carbon investment fund is based on the anticipated ten-year value of carbon credits from the project. By implementing a carbon project, GMF is committing to maintaining above average timber stocks on the property. This pledge will be monitored and verified over a 100-year period.
“We are delighted to make an investment in such a charismatic forestry project, as it truly reflects Climate Trust Capital’s investment philosophy and ongoing strategy,” said Sean Penrith, executive director for The Climate Trust. “We have found that early-stage finance is critical, offering greater potential for impact as projects are developed, and we are pleased to see that strategy put into action with such a worthy partner.”
“The Climate Trust’s unique ability to provide upfront capital in combination with taking out-year price, production and regulatory risk is exactly the type of offering that many long-dated emission reduction projects need to get on their feet,” said Bluesource CEO, Eric Townsend. “Applied to the right project, it really plows through the regulatory uncertainty in the market today.”
“Given that more than a century of forest management and informed stewardship has gone into restoring the health and vitality of our working native forest, this exciting new development with Bluesource and The Climate Trust begins a dynamic new century of commitment to carbon sequestration for the public good,” said Charles R. Fritz, GMF chair.
With roots dating back to 1909, GMF is one of the nation’s oldest forest conservation legacy organizations. The project encompasses a large woodland area located in the uplands of northern Litchfield County, Connecticut. The forest is a critical part of watersheds providing fresh water to metropolitan areas to the south. Part of an ecologically vital corridor, this forest forms a vital bridge for wildlife and migratory songbirds in the northeast. In addition to harboring wildlife, the forest has historically served as a field training location for Yale Forestry and Environmental Studies graduate students and undergraduates from other forestry programs; recently serving to educate the next generation of foresters on carbon forestry management practices.
Climate Trust Capital’s Fund I is focused on supporting innovative U.S.-based carbon offset projects in the forestry, grassland conservation, and livestock digesters sectors. The GMF project was identified as a match for conservation finance, with the offer of upfront investment tipping the scales in the favor of developing a forestry carbon offset project. The GMF project will be developed in accordance to the California Air Resources Board (ARB) protocol for U.S. Forest Projects, and is estimated to generate more than 360,000 offsets over its first 10-years of operation.
“The Trust’s technical experts are enthusiastic about the potential for impact in the forestry sector, expecting it will play a large part in building our Fund I portfolio,” said Kristen Kleiman, director of investments for The Climate Trust. “Climate Trust Capital leverages our technical expertise and robust buyer network, to ensure optimal long-term performance and the best possible premiums for the sale of generated credits.”
“We are proud of the progress we’ve made in building and deploying our Fund in the past six months, and look forward to future investments in carbon that align with our conviction that carbon prices are undervalued and will provide investors with long-term, risk-adjusted returns,” continued Penrith. “Our patient approach rewards project owners as carbon prices increase over time, while meeting our personal commitment to preventing a disastrous rise in global temperatures brought about by climate change.”
Image credit: Flickr/Chris Connelly