Milbank LLP advised J.P. Morgan, as part of a syndicate of lenders, on the successful closing of a landmark non-recourse project finance credit facility of up to $210 million for Chestnut Carbon, a nature-based carbon removal developer. The transaction is a first-of-its-kind bank financing for a US voluntary carbon removal afforestation project.
For Chestnut, the financing delivers the financial resources to expand its afforestation footprint and carbon removal capacity.
The innovative credit facility is backed by a long-term carbon removal supply agreement executed earlier this year – one of the largest of its kind in the US. The success of this financing demonstrates that carbon removal projects can be structured as investable, bankable assets, much like more established infrastructure classes.
“This financing represents a landmark moment for the voluntary carbon market in the US and a significant step forward for nature-based climate solutions,” said Dan Bartfeld, chair of Milbank’s Global Project, Energy and Infrastructure Finance Group. “We’re proud to have advised on such a pioneering transaction that signals the potential for scalable investment in afforestation and carbon removal projects.”
“Being trusted to advise on this landmark carbon removal financing reflects the depth and versatility of our cross-disciplinary platform,” added Global Project, Energy and Infrastructure Finance partner Sean C. O’Neill. “It’s a strong example of how we collaborate with clients to navigate the complexities of innovative, market-defining transactions.”
The Milbank team was led by Mr. Bartfeld and Mr. O’Neill, along with Global Project, Energy and Infrastructure Finance Group associates Olivia Scandura, Andy Lassman, Cecilia Legaspi and Johann Sarna.
