thumbnail of Carbon Plantations Debenture 1

Carbon Plantations Debenture 1

Interest rate 8.0% a year
Term 10 years
Total Invested £3.50m
1723  investors
Maturity date 31 Mar 2032
thumbnail of Carbon Plantations Debenture 1

What does the company do?

Carbon Plantations is helping farmers convert previously intensively farmed agricultural land into hardwood forestry plantations. The company is taking a new approach by planting fast-growing Phoenix One® hardwood trees, a non-invasive variety of Paulownia, supplied by WeGrow CropTec GmbH, who have been producing varieties of Paulownia successfully since 2009.

The company typically leases land from a landowner under a long term lease and then manages the process of planting the trees, managing the woodland and then harvesting the trees when ready. The planting areas are chosen and refined through significant Environmental Impact Assessment work and stakeholder engagement.

The company’s income is derived from the sale of timber as well as the sale of carbon credits. The timber produced is strong and lightweight, providing a source of high value, sustainable UK-grown timber that can be used in place of slow-growing species such as oak, with applications in light construction and furniture making. The woodland project also qualifies for carbon credit payments under the Woodland Carbon Guarantee Scheme run by the Forestry Commission, which is intended to promote the planting of new woodlands in England.

Why did the company raise money?

This was Carbon Plantations’ first investment on Abundance. The money raised by this investment was used to fund a 195 hectare plantation on the Euston Estate in Suffolk. The land used had traditionally been used for root crops such as sugar beet and potatoes in a 6-7 year rotation.

The trees were planted in 2022 with the first harvest expected after 6 years, and then every 9-10 years.

How does the company expect to repay the investment?

Carbon Plantations expects to repay investors either through the revenue earned from timber sales and carbon credits, or refinancing the debt by raising funding from other sources.

How is the company making an impact?

Carbon Plantations aims to provide the wood needed to build and live sustainably, while helping to regenerate our soils and boost biodiversity. Trees can help mitigate climate change by reducing the amount of greenhouse gases in the atmosphere. They do this by absorbing carbon dioxide through photosynthesis, using the carbon to produce sugars for tree growth and releasing the oxygen back into the air. As trees grow, they store carbon in their leaves, twigs and trunk, roots and in the soil around them. This capture and storage of carbon in soils and trees is a natural way of sequestering carbon. The sustainable timber will be sold, enabling the carbon to be locked up not only during the tree’s growth but also during the time that it is used for hardwood applications such as in furniture or construction materials.

The Phoenix One® hardwood trees are fast growing — up to 4m a year — which means they absorb carbon dioxide up to seven times faster than newly planted native woodland and will be sustainably harvested by coppicing. As well as absorbing carbon, this project also offers a range of other environmental and biodiversity benefits. As deciduous trees they will allow an understorey of biodiverse plants to develop supporting insects (including bees and other pollinators) and other wildlife. And because they will be planted on formerly intensively cultivated land, the trees will help regenerate and improve the soil structure. 15% of the land is planted with new native woodland, with 14% open grassland sown with a nectar and wild bird-friendly seed mix to encourage biodiversity.

The Phoenix One® hardwood tree plantation at the Euston Estate, Suffolk
The Phoenix One® hardwood trees at the Euston Estate, Suffolk

Key terms

Issuer Carbon Plantations
Return 8.0% a year
Term period 10 years
Start date 1 April 2022
Maturity date 31 March 2032
Capital repayment Lump sum on maturity
Amount raised £3,501,913.53
Return structure

Some interest is paid every 6 months over the life of the investment with capital repaid as a lump sum at maturity.

Every 6 months you will be paid 50% of your interest with the other 50% being rolled up and only paid at maturity at the same time as the capital repayment. The unpaid rolled up interest will continue to earn interest at the same rate.

Secured or unsecured Secured It is important to understand that security does not guarantee repayment of your investment or returns.
Security package

This investment holds first ranking security over all of the assets of Carbon Plantations Limited under a package of security documents including:

  • security agreements by way of fixed and floating charge over all of the assets of Carbon Plantations Limited
  • share security over all the issued share capital of Carbon Plantations Limited
  • various direct agreements which provide the Security Trustee with certain rights such as being notified of a termination event or, in some cases, stepping into the company‚Äôs shoes upon a termination event under certain project contracts (such as the leases; operation and management agreement; tree supply and establishment agreement).

This investment ranks “pari passu” (i.e. they will share equally any available assets or any proceeds realisable from the sale of any of those assets) to the second Debenture issued by Carbon Plantations Limited on Abundance.

Early repayment options

The company has the option to repay the investment at any point from 1 April 2025 onwards subject to paying an early redemption fee (equivalent to the next 6 months's interest payment) and by giving 20 days notice.

The company can also make an early repayment in certain circumstances, such as a change of control of the company (for example, if some or all of the company was sold to a new owner) or a regulatory/tax requirement.

See the Debenture Deed for details of all circumstances in which the option for early repayment may be exercised.

Documents

Debenture Deed
Download PDF The debenture deed sets out the legal agreement and terms for this investment.

Payment schedule

This table gives a breakdown of what is due to be paid back on this investment, based on an example investment of £1,000.

Payment schedule table
Payment date Capital repayment Interest Total
30 September 2022 £0.00 £20.05 £20.05
31 March 2023 £0.00 £20.34 £20.34
29 September 2023 £0.00 £20.86 £20.86
28 March 2024 £0.00 £21.28 £21.28
30 September 2024 £0.00 £21.71 £21.71
31 March 2025 £0.00 £22.02 £22.02
30 September 2025 £0.00 £22.58 £22.58
31 March 2026 £0.00 £22.91 £22.91
30 September 2026 £0.00 £23.49 £23.49
31 March 2027 £0.00 £23.84 £23.84
30 September 2027 £0.00 £24.44 £24.44
31 March 2028 £0.00 £24.93 £24.93
29 September 2028 £0.00 £25.43 £25.43
30 March 2029 £0.00 £25.80 £25.80
28 September 2029 £0.00 £26.46 £26.46
29 March 2030 £0.00 £26.85 £26.85
30 September 2030 £0.00 £27.53 £27.53
31 March 2031 £0.00 £27.93 £27.93
30 September 2031 £0.00 £28.64 £28.64
31 March 2032 £1,000.00 £515.65 £1,515.65
Total £1,000.00 £972.74 £1,972.74

Updates

These updates tell the story of the investment over its life and include information reported to investors by the company or council behind the investment. The updates are provided for informational purposes only and do not constitute an inducement or invitation to invest. Information provided at the time of publishing may no longer be accurate.

Please read the full update here

An investment return from Carbon Plantations Debenture 1 was paid today.

Please read the full update here

Please read the full update here

An investment return from Carbon Plantations Debenture 1 was paid today.

Please read the full update here

Please read the full update here

An investment return from Carbon Plantations Debenture 1 was paid today.

An investment return from Carbon Plantations Debenture 1 was paid today.

Please read the full update here

We are pleased to say we have completed the planting of the trees for our Euston project and the establishment phase is now complete.

It was certainly challenging to establish our first plantation here at Euston considering we have had very little rain since April. Ordinarily we would rely on the rain to break down the soil ready for planting but we have had to use brute force to knock the land into shape, meaning we have spent more days and nights on tractors cultivating than we had anticipated.

The tree saplings ready to plant
The tree saplings ready to plant

The irrigation system was successfully installed and the 1st planting in mid-May went well - we planted 52,000 trees in 6 days by hand into cold but dry seedbeds. A flurry of irrigation and fertigation (injecting water soluble fertiliser) followed and the trees happily established within a few weeks. We were comfortable to sign off our establishment clause with our tree supplier We-Grow after about 3 weeks, and then got busy preparing for the 2nd planting (which staggered our workload and also enabled us to learn from the 1st planting) a month later. We delayed the planting for another week as land remained difficult to prepare without rain but when the remaining 64,000 trees arrived to plant we were well prepared.

The drip irrigation system
The drip irrigation system

We planted the 2nd phase of trees in 5 days - the professional planting team averaged much higher planting outputs as they got to know the tree and how it should be handled more effectively. We-Grow were on hand to advise on all aspects of establishment which has fostered our relationship further. We have achieved around 98% establishment whereas we had modelled 95% so we were delighted with the results.

Initial observations are that the later the tree was planted the quicker it was to establish so we have the converse position of the later plantings now outgrowing the first plantings. We have had a heavy weed burden to cope with on the first planting which we are now dealing with. A team of hand weeders have been on site for the past month pulling out weeds that are crowding some trees. Some of this has created leaf loss and checked growth, but they are bouncing back well now they can breathe.

The trees have been planted in two phases
The trees have been planted in two phases

With the incredibly dry weather, it has made the irrigation and fertigation requirement more frequent, yet straightforward. The drip irrigation system we have implemented targets each tree directly and is therefore very efficient and uses 87.5% less water than a traditional irrigation rain gun. Our water use is supplied by the Euston Estate under a contract which allows us to use a certain water quota each year. We have only used about 25% of our annual contracted water amount to date even without any rainfall, so whilst the country has run out of irrigatable water to a greater or lesser extent - we have plenty available relative to our requirements. If it didn’t rain for another 2 months to the end of October, we’d still have enough water to see us through to the late autumn when the tree would shut down for the winter.

The trees have had a 98% establishment success rate
The trees have had a 98% establishment success rate

Root progression has been greater than expected and we are midway through the growth phase which remains encouraging, especially on the 2nd plantings. The 1st plantings are now catching up due to their colder start to the season and the additional weed burden which had arrested the growth in comparison. We have also used the opportunity to trial different approaches to weed control so we are more informed for next season.

Finally, the team we have put together have worked tirelessly since March, often without a break for weeks on end to make this all happen. We are truly fortunate to have such a dedicated team, so special thanks goes to Tim and Andrew, Laura, Juris and Janis for making this possible.

This investment closed today.

Please read the full update here

Please read the full update here

Please read the full update here

Please read the full update here

Please read the full update here

Please read the full update here

Carbon Plantations Debenture 1 opened for investment today.