Carbon Fund Investment Supports Ecological Stewardship of Upper St. John River Forest

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Climate Trust Capital closes forestry investment with The Nature Conservancy to fund increased carbon sequestration in an ecologically valuable region of Maine

"We are delighted to add the Upper St. John River Forest to our well diversified portfolio of seven, quality investment grade projects," said Kristen Kleiman, chief investment officer for The Climate Trust. "Fund I is now fully committed, almost a year ahead of schedule."

U.S.-based private investment fund Climate Trust Capital, an independent entity of the nonprofit The Climate Trust, today announced it has closed on one of its final carbon investments
in its $5.5 million Fund I. The St. John Improved Forest Management carbon project agreement is Climate Trust Capital's largest investment at $2.2 million.

The Fund I pilot launched in October 2016 was seeded by a Program-Related Investment from the David and Lucile Packard Foundation and supported by a Conservation Innovation Grant awarded in 2015 by the USDA's Natural Resources Conservation Service (NRCS). Fund I's investment thesis is to identify and invest in carbon offset projects that produce market rate risk-adjusted returns in the forestry, grassland conservation, and livestock digester sectors.

Climate Trust Capital's Fund I will develop and manage the Upper St. John River Improved Forest Management carbon project with The Nature Conservancy (TNC) in Maine. The 124,000-acre project is located within the 160,000-acre FSC-certified Upper St. John River Forest in northern Maine. Fund I's investment is based on the anticipated ten-year value of carbon offsets generated from the project. Climate Trust Capital plans to sell the carbon offsets in the Western Climate Initiative compliance market. Climate Trust Capital and TNC will work cooperatively over the investment term to increase the above average timber stocks on the property. The carbon project will be monitored and verified over a 100-year period. The St. John project will be developed in accordance with the California Air Resources Board (ARB) protocol for U.S. Forest Projects.

"Carbon can be a valuable revenue stream for working forest owners interested in balancing ecological and financial goals. By generating offset credits through the sequestration of carbon in wildlife and riparian reserves and transitions to longer timber rotations, forest owners can find additional management flexibility," said Julius Pasay, forest and grassland asset manager for The Climate Trust. "We expect the St. John project to demonstrate how carbon can be used in conjunction with timber to generate revenue and inspire other landowners to realize carbon revenue through ecological forestry."

Founded in 1951, TNC's mission is, "to conserve the lands and waters on which all life depends." In Maine, the TNC forest program focuses on the importance of forests to nature and people. The Upper St. John River property located in Northern Maine-bordering Quebec-was acquired by TNC in 1998.

"We are fortunate to be able to expand our partnership with The Nature Conservancy to now include Maine," continued Julius. "Investing in a project with such a high conservation value and with a mission-aligned partner is an exciting prospect. In addition to the property's carbon value, this forest helps conserve the renowned Upper St. John River, the protection of which was a contributing factor to TNC purchasing the land."

"For nearly two decades, The Nature Conservancy has been a pioneer in conservation-oriented forest management on this ecologically valuable property. Developing a carbon project on the Upper St. John is a great opportunity to further invest in the future of the forest, while demonstrating the potential of blending management for timber, carbon, and other values," said Mark Berry, TNC Maine forest program director. "We're pleased to partner with the expert team at The Climate Trust. Their upfront investment helped make this project feasible."

"We are delighted to add the Upper St. John River Forest to our well diversified portfolio of seven, quality investment grade projects," said Kristen Kleiman, chief investment officer for The Climate Trust. "Fund I is now fully committed, almost a year ahead of schedule. As we prepare for the launch of future funds, we look forward to investing in other carbon projects that align with our conviction that carbon prices are undervalued and will provide investors with attractive long-term, risk-adjusted returns."

"The Trust continues to be enthusiastic about the potential for impact in the forestry sector, expecting it will play a large part in building our next portfolio," said Sheldon Zakreski, chief operating officer for The Climate Trust.

Building upon a legacy of innovation and leadership in the carbon market, The Climate Trust mobilizes conservation finance to maximize environmental returns. We value air, water and soil through the financing, development and sale of qualified offsets and a relentless investment in people and projects with environmental purpose | |

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