Carbon Streaming Corporation (Cboe CA:
NETZ)
(OTCQB:
OFSTF) (FSE:
M2Q)
(“
Carbon Streaming” or the
“
Company”), in collaboration with Microsoft
Corporation (“
Microsoft”) and Rubicon Carbon
Capital LLC (“
Rubicon”), is pleased to announce
that it has entered into a carbon credit streaming agreement (the
"
Azuero Reforestation Stream”)
with Azuero Reforestación Colectiva, S.A. (“
ARC”),
a wholly owned subsidiary of leading project developer Ponterra
Ltd. (“
Ponterra”), for the ARC Restauro Azura
project (the “
Azuero Reforestation Project” or the
“
Project”) located in Panama.
Deal Highlights
- The Project is
expected to generate 3.24 million carbon removal credits through
2052.
- Carbon
Streaming, alongside Rubicon and Microsoft, will fund 100% of
project costs over seven years.
- Carbon Streaming
will receive 13.5% of the credits generated by the Project.
- Microsoft has
entered into an offtake agreement to purchase 100% of Carbon
Streaming’s credits from the Project generated through 2040.
- Carbon Streaming
will act as sole marketer of ARC’s carbon credits not already
committed to the co-investors under the Azuero Reforestation
Stream.
- The expected IRR from the Project is
consistent with Carbon Streaming’s target IRR for other
investments, and the addition of a long-term carbon credit offtake
has significantly de-risked cash flows.
- Verra has
selected the Project to participate in its new Sustainable
Development Verified Impact Standard (SD VISta) Nature Framework
program.
- The Project has
been designed to target six UN Sustainable Development Goals: 1 (No
Poverty), 4 (Quality Education), 8 (Decent Work and Economic
Growth), 13 (Climate Action), 15 (Life on Land), and 17
(Partnerships for the Goals).
- The Azuero
Reforestation Stream and concurrent offtake agreement with
Microsoft represents one of the largest nature-based carbon removal
deals to date.
The Azuero Reforestation Project is expected to
restore 10,000 hectares of degraded tropical forest on the Azuero
Peninsula in Panama that has been converted to low-density cattle
ranchland over the last century. Ponterra is actively restoring
this degraded land with over 75 native tree species, using a
vertically integrated reforestation strategy including nurseries,
seedbanks, and deep community involvement. The Project will enable
over 100 local landholders to participate in and earn an income
from the reforestation activities through long-term annual payments
and a share of carbon credit sales. Ponterra expects to plant over
six million trees and create more than 300 permanent local jobs in
the local community. The Project has been designed to target the
following UN Sustainable Development Goals: 1 (No Poverty), 4
(Quality Education), 8 (Decent Work and Economic Growth), 13
(Climate Action), 15 (Life on Land), and 17 (Partnerships for the
Goals). Given these strong social and environmental co-benefits,
Verra has selected the Project to participate in their new SD VISta
Nature Framework.
The Azuero Reforestation Project is expected to
remove 3.24 million tonnes of carbon dioxide equivalent
(“tCO2e”) and generate an equivalent number of
carbon credits under Verra’s newest Afforestation, Reforestation
& Revegetation (ARR) methodology, VM0047. The Project is being
funded by an investor group composed of Carbon Streaming,
Microsoft, and Rubicon. The Project has the potential to expand
5-10x, and the investor group has a right of first offer to fund
Project expansions. Initial carbon credit issuance from the Project
is expected in 2027.
“Ponterra’s mission to restore biodiversity and
uplift local communities by designing and operating high-integrity
nature projects comes to life today. We are thrilled to be working
with Carbon Streaming, one of the most respected and experienced
investors in nature-based carbon credits in the market, to reach
the scale needed to meaningfully impact the twin biodiversity and
climate crises,” said Ponterra CEO Celia Francis.
In one of the largest nature-based carbon
removal offtakes to date, Microsoft is expecting to receive
approximately 1.6 million carbon credits from the Project, a
portion of which will come from a long-term offtake agreement to
purchase 100% of carbon credits that Carbon Streaming receives from
the Project through 2040 –approximately 311,500 carbon credits.
This is the second multi-year offtake that Carbon Streaming has
signed with Microsoft in the last year.
Justin Cochrane, CEO of Carbon Streaming,
expressed his enthusiasm about the deal, stating, "This stream with
Ponterra represents a transformative step for Carbon Streaming,
illustrating our commitment to high-quality carbon removal
projects. By joining forces with esteemed co-investors and securing
pre-contracted cash flows, we're demonstrating a deal structure
that promises significant environmental impact and predictable
future cash flows."
Brian Marrs, Senior Director of Energy and
Carbon Removal at Microsoft said, “Microsoft is happy to support
the Azuero Reforestation Project in collaboration with Ponterra,
Rubicon Carbon, and Carbon Streaming. This project has been
designed with a community-first approach building on the good work
of long-time conservation leaders, Pro Eco Azuero, ensuring the
project’s positive impacts not only directly benefit local
communities but endure.”
Under the terms of the Azuero Reforestation
Stream, Carbon Streaming, alongside Rubicon and Microsoft, will
fund 100% of project costs over seven years. Carbon Streaming will
make an initial upfront deposit of US$0.315 million, with
additional milestone payments of up to US$6.750 million as the
Project achieves planting and sapling survival milestones. Carbon
Streaming will receive 13.5% of total credits, which is expected to
be approximately 438,000 carbon credits through 2052. Closing
of the Azuero Reforestation Stream is subject to customary
conditions with closing expected to occur by the end of Q2 2024.The
Project is the first streaming agreement where a majority of the
carbon credits Carbon Streaming will receive are pre-contracted
through an offtake agreement at closing, an investment model that
the Company expects to replicate in the future. Carbon Streaming
has also entered into a marketing agreement with ARC, pursuant to
which Carbon Streaming has been appointed as sole marketer of ARC’s
carbon credits for the life of the Project, other than those
already committed to the co-investors in the Azuero Reforestation
Stream. The expected IRR from the Project is consistent with Carbon
Streaming’s target IRR for other investments, and the addition of a
long-term carbon credit offtake partner in Microsoft has
significantly de-risked cash flows.
About Carbon Streaming
Carbon Streaming aims to accelerate a net-zero
future. We pioneered the use of streaming transactions, a proven
and flexible funding model, to scale high-integrity carbon credit
projects to advance global climate action and additional United
Nations Sustainable Development Goals. This approach aligns our
strategic interests with those of project partners to create
long-term relationships built on a shared commitment to
sustainability and accountability and positions us as a trusted
source for buyers seeking high-quality carbon credits.
The Company’s focus is on projects that have a
positive impact on the environment, local communities, and
biodiversity, in addition to their carbon reduction or removal
potential. The Company has carbon credit streams and royalties
related to over 20 projects around the world, including
high-integrity removal, reduction and avoidance projects from
nature-based, agricultural, engineered and community-based
methodologies.
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About Ponterra
Ponterra is a leading developer and operator of
the world’s highest quality carbon and biodiversity projects. By
focusing on restoring nature on degraded agricultural lands,
Ponterra aims to reverse climate change, bring back biodiversity,
and uplift rural communities. Their vertically integrated model
enables end-to-end control of the entire restoration process and
establishes a precedent for how to scale nature-based solutions to
create ecological and human prosperity. Founded in 2023 in London
by experienced nature-based solutions and climate tech operators,
Ponterra now has a diverse team of professionals across the UK, US,
and Latin America. For more information, visit
www.ponterra.eco.
ON BEHALF OF THE COMPANY:Justin
Cochrane, President & Chief Executive Officer Tel:
647.846.7765info@carbonstreaming.com www.carbonstreaming.com
Investor
Relationsinvestors@carbonstreaming.com
Mediamedia@carbonstreaming.com
Cautionary Statement Regarding
Forward-Looking Information
This news release contains certain
forward-looking statements and forward-looking information
(collectively, “forward-looking information”) within the meaning of
applicable securities laws. All statements, other than statements
of historical fact, that address activities, events or developments
that the Company believes, expects or anticipates will or may occur
in the future, are forward-looking information, including, without
limitation, statements regarding the timing and the amount of
future carbon credit generation and tCO2e removals from the
Project; registration, timing and the amount of future carbon
credit issuances from the Project; expected use of proceeds from
stream agreements; the impacts of the Project on the surrounding
ecosystem and other expected co-benefits; the timing and closing of
the Azuero Reforestation Stream; the timing and the expected
cash flow to Carbon Streaming from carbon credit sales (including
the offtake) and marketing fees; timing to meet additional payment
milestones; expectations regarding the number of landholders;
expectations on the Company's investment model to be used in the
future; and statements with respect to execution of the Company’s
portfolio and partnership strategy.
When used in this news release, words such as
“estimates”, “expects”, “plans”, “anticipates”, “will”, “believes”,
“intends”, “should”, “could”, “may” and other similar terminology
are intended to identify such forward-looking statements. This
forward-looking information is based on the current expectations or
beliefs of the Company based on information currently available to
the Company. Forward-looking information is subject to a number of
risks and uncertainties that may cause the actual results of the
Company to differ materially from those discussed in the
forward-looking information, and even if such actual results are
realized or substantially realized, there can be no assurance that
they will have the expected consequences to, or effects on, the
Company. They should not be read as a guarantee of future
performance or results, and will not necessarily be an accurate
indication of whether or not such results will be achieved. Factors
that could cause actual results or events to differ materially from
current expectations include, among other things: general economic,
market and business conditions and global financial conditions,
including fluctuations in interest rates, foreign exchange rates
and stock market volatility; volatility in prices of carbon credits
and demand for carbon credits; change in social or political views
towards climate change, carbon credit and ESG initiatives and
subsequent changes in corporate or government policies or
regulations and associated changes in demand for carbon credits;
limited operating history for the Company’s current strategy; risks
arising from competition and future acquisition activities;
concentration risk; inaccurate estimates of growth strategy;
dependence upon key management; impact of corporate restructurings;
reputational risk; failure or timing delays for projects to be
registered, validated and ultimately developed and for emission
reductions or removals to be verified and carbon credits issued
(and other risks associated with carbon credits standards and
registries); foreign operations and political risks including
actions by governmental authorities, including changes in or to
government regulation, taxation and carbon pricing initiatives;
uncertainties and ongoing market developments surrounding the
validation and verification requirements of the voluntary and/or
compliance markets; due diligence risks, including failure of third
parties’ reviews, reports and projections to be accurate;
dependence on project partners, operators and owners, including
failure by such counterparties to make payments or perform their
operational or other obligations to the Company in compliance with
the terms of contractual arrangements between the Company and such
counterparties; failure of projects to generate carbon credits, or
natural disasters such as flood or fire which could have a material
adverse effect on the ability of any project to generate carbon
credits; volatility in the market price of the Company’s common
shares or warrants; the effect that the issuance of additional
securities by the Company could have on the market price of the
Company’s common shares or warrants; global health crises, such as
pandemics and epidemics; and the other risks disclosed under the
heading “Risk Factors” and elsewhere in the Company’s Annual
Information Form dated as of March 27, 2024 filed on SEDAR+
at www.sedarplus.ca.
Any forward-looking information speaks only as
of the date of this news release. Although the Company believes
that the assumptions inherent in the forward-looking information
are reasonable, forward-looking information is not a guarantee of
future performance and accordingly undue reliance should not be put
on such statements due to the inherent uncertainty therein. Except
as may be required by applicable securities laws, the Company
disclaims any intent or obligation to update any forward-looking
information, whether as a result of new information, future events
or results or otherwise.
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