Microsoft, carbon markets solutions provider Climate Impact Partners, and climate-focused project finance business Terra Natural Capital announced today a new finance and carbon removal purchase agreement, aimed at supporting the development of a large-scale afforestation project in India.
As part of the agreement, Microsoft will will purchase 1.5 million tonnes of verified carbon removal credits over 30 years, representing 50% of the project’s projected 3 million tonne output.
The new agreement brings together project development expertise from Climate Impact Partners, finance from Terra Natural Capital, and a long-term purchase commitment from Microsoft, supporting the Panna afforestation project in the Madhya Pradesh State, India. The project, spanning 20,000 hectares, will see up to 11.6 million mixed native trees planted across farmer and community land.
Erica Vertefeuille, Managing Director, Terra Natural Capital said:
“This transaction reflects the power of collaboration between trusted project developers, corporate demand, and innovative finance to unlock climate impact. We recognize that access to project finance is a critical need for the carbon removal market to scale and are committed to providing long-term capital that will accelerate project development and empower corporates to achieve their climate targets.”
The agreement marks Microsoft’s first carbon removal purchase in India for Microsoft, and forms part of the tech giant’s rapidly expanding carbon credit portfolio, part of the company’s initiative to become carbon negative by 2030. The portfolio includes several large-scale afforestation and reforestation-based agreements, including a 7 million ton deal announced in January with Chestnut Carbon, in addition to technologies including, ocean-based carbon removal, and biochar-based projects, and direct air capture (DAC) agreements.
Brian Marrs, Senior Director Energy Markets, Microsoft said:
“At Microsoft, we believe that high-quality, nature-based solutions are vital to addressing climate change. Panna forms an important part of our growing portfolio of carbon removal projects – our first in India and largest in the APAC region. The collaboration with Climate Impact Partners helps to ensure that millions more trees are planted, more carbon is removed from the atmosphere, more jobs are created, and more finance flows back to local communities.”
In addition to the carbon removal, the companies highlighted other key benefits of the project, including economic empowerment through a share of carbon credit sales to farmers and income generation from the sale of fruit and medicinal produce from the trees planted, training programs on climate-smart agricultural techniques to help enhance long-term yields, the implementation of large-scale water infrastructure to capture and conserve water, and improved biodiversity by focusing on native species and attracting butterfly and bird species back to currently degraded lands.
Sheri Hickok, CEO, Climate Impact Partners said:
“By securing a long-term supply of high-quality carbon credits, this model empowers companies like Microsoft to meet their ambitious climate targets, drive growth in the carbon removal market, and bring benefits to communities most impacted by climate change. Panna exemplifies how companies can help scale large-scale carbon removal infrastructure.”
