Caspian Debt invests in ‘climate-smart agriculture’ to boost sustainable agriculture

Caspian Debt invests in ‘climate-smart agriculture’ to boost sustainable agriculture

Caspian Debt, a corporate lending financial services company that has been supporting companies in the food and agriculture sector since 2014, is focusing on investing in companies that promote environment friendly agricultural practices and envision a greener future with a positive impact.

Avishek Gupta, Managing Director and Chief Executive Officer of Caspian Debt, referred to this vertical of investment as “climate-smart agriculture,” saying, “With Caspian Debt’s commitment as India’s first signatory to Partnership for Carbon Accounting Finance (PCAF) and our overall focus on climate adaptation and mitigation, we believe that the agri sector has a significant role to play.”

He stated that increasing weather events, ranging from heat stress to wildfires, have made agriculture less predictable, adding, “It is essential for us at Caspian Debt to help farmers and agri companies transition to practices that increase resilience and dramatically decrease reliance on fossil-fuel based chemicals.”

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Evaluate climate actions

In an online conversation with businessline, he stated that Caspian Debt invests in climate-smart agriculture companies that actively contribute to lowering or replacing carbon footprints. Its credit assessment entails evaluating its companies’ climate actions and encouraging them to implement climate-smart practices.

“We engage our customers by monitoring the outcomes and asking them to report any relevant information. Furthermore, we have incorporated such covenants into our offerings to help businesses understand the significance of these initiatives,” he stated.

The lender’s podcast ‘Caspian Climate Conversations’ invites its portfolio companies to share their perspectives. Caspian Debt is committed to measuring the financed emissions of its portfolio. “We intend to use this data over time to develop a portfolio that is less emission-intensive and more climate resilient. “We plan to build dedicated blended finance facilities,” he stated.

55 firms are funded

Caspian Debt stands out from other lenders due to its ability to lend up to ₹15 crore without mortgage collateral and to companies that are yet to make profits. We offer a range of loan products, including term loans, revolving facilities, venture debt, purchase order financing, and custom repayment schedules, starting with loan sizes as low as ₹50 lakh, differentiates us from venture debt players”.

Since 2014, approximately 55 companies in the food and agri supply chain have received funding totaling ₹873 crore (as of August 1), according to the speaker. In 2023-24, the company funded ₹159.3 crore. Also Read | India requires green revolution 2.0, next-gen of reforms to make agril climate-resistant & sustainable: RBI

In terms of debt products sought by businesses, he stated that the most popular loan type is a revolving working capital financing facility. This revolving facility fills gaps in working capital by financing purchase orders and other operational requirements. “Approximately 80% of the companies in our agriculture portfolio benefit from the revolving facility structure, and we continue to improve the facility based on our ongoing credit assessments. Several of these companies have received both a working capital line and a term loan structure to meet their financing requirements,” he said.