Kumo launches lending tool for carbon project developers
Quantum Commodity Intelligence – Germany-based company Kumo has launched a platform allowing carbon project developers to model their financing needs and plan investments by putting them in touch with prospective lenders.
The platform is one of the first globally to focus on lending to carbon projects, rather than funding via selling shares in a business, amid the boom in long-term offtake agreements seen in the industry since 2022, when the spot market began taking a back seat.
The platform holds future issued credits as collateral - an asset pledged by a borrower as security for a loan - and developers only repay the principal and interest once the carbon credits have been sold.
The company also offers a debt financing tool for developers allowing them to assess how much interest they will have to pay with the ability to tweak variables such as: borrowing amounts, repayment profiles and loan tenors.
The company says developers can then use its platform, which is powered by the blockchain, to raise other types of finance and investments.
"Unlike traditional equity-based funding, our approach leverages the vast potential of the debt market to scale carbon removal projects to the levels necessary for significant environmental impact," says Kumo.
"By integrating legal frameworks with cutting-edge technology, Kumo facilitates the flow of institutional capital into climate action, ensuring that carbon finance becomes a lucrative and risk-managed business."
Meanwhile, for financiers, Kumo offers the ability to assess projects' data seamlessly by standardising information and connecting directly with online registries.
It also assesses a project's 'debt financeability' by considering a range of prices for carbon offsets and other variables.
Kumo says it will soon announce participation from a major financial player on its first biochar bond, while it is working with fellow German firm Biochar Zero to assess suitable projects and bring them onboard.
"The solution to climate change is money," said Kumo founder and chief executive Robin Klemens.
"By marrying financial revenue with climate action, we can prevent a climate disaster."
Last year, Kumo issued a "carbon-secured loan", which was a proof of concept with developer Vlinder and financial company ABN Amro.
The company was first announced in 2O22 during the boom in crypto-related carbon companies.
KumoDAO, as it was known then, sought to establish a new currency backed by carbon credits, also known as a stable coin, before pivoting to its current platform model.
