A&O Shearman advises Sistema.bio Inc on market-first finance vehicle aimed at expanding climate finance for farmers and accelerating methane mitigation

With more than 15 years of experience and operations in 35 countries across three continents, Sistema.bio is a global leader in biogas technology and climate solutions for smallholder farmers. Through its biogas technology, capacity building and inclusive financing, the company tackles the challenges of poverty, food security, and the climate crisis.

The innovative finance vehicle, FarmCarbon, is designed to address the barriers that have limited investment in reducing agricultural methane. The vehicle deploys prefinancing to biogas project development, securing future emissions reductions that are later delivered to carbon credits buyers through multi-year purchase agreements. The vehicle's design focuses on rigorous pre-validation, digital tracking, and a robust legal and financial framework to deliver high-quality impacts and emissions reductions, ensuring that financial benefits reach farmers upfront and provide them with the necessary long-term support to maximize the benefits of biogas technology over time.

A&O Shearman securitization partner Salim Nathoo said: “This deal is a first-of-its-kind, market-leading financing of carbon credits at scale. The transaction establishes a scalable architecture that will allow Sistema.bio to add new jurisdictions as it works with farmers across the world. Given that developing economies are predominantly agrarian and roughly one-third of the world’s population works in farming, the potential for this transaction to create positive change for developing communities—and to deliver lasting climate and waste-reduction impact—is tremendous.”

The A&O Shearman deal team in London was led by securitization partner Salim Nathoo alongside senior associate Pedro Nunes, associate Yipsum Wu, and trainee Rebecca Moore. In Luxembourg, the team was led by partner Frank Mausen alongside counsel Philippe Noelter and associate Belen Alemany Lopez with tax partner John Hibbard in New York.

This transaction demonstrates A&O Shearman’s ability to provide cutting edge expertise in emerging fields across various jurisdictions with great cross discipline and cross geographic connectivity, and the future expansion of this transaction into other jurisdictions will continue to be a testament to that ability.