Offset8 announces the first transaction from Abu Dhabi to finance Sawa’s $50m carbon credit project in Indonesia

Offset8 Capital Limited (“Offset8”), an Abu Dhabi Global Market-based proprietary asset management firm and a financial advisor authorised and regulated by the Financial Services Regulatory Authority of the ADGM, announces the signing of its first transaction to finance Sawa’s biochar carbon credit project (the “Project”) in Indonesia (the “Transaction”).

The Project is estimated to generate approximately US$50 million worth of carbon credits over the next 10 years. Offset8 has facilitated an early-stage investment in the Project and intends to support Sawa with Offset8’s expertise throughout the life of the Project.

The Project will be developed in multiple regions across Indonesia, starting with Majalengka Regency in West Java, and expanding across Java and into Sumatra. Historically, agricultural waste has been stored in piles and left to decay or has been burned, posing a fire hazard, contributing to respiratory health issues, and leading to methane production. 45 million tonnes of agricultural crop residues are burned every year in Indonesia, emitting on average 2 million tonnes of CO2 equivalent every year. Sawa will convert agricultural waste into biochar, which offers a sustainable and eco-friendly solution to the waste management problem, to generate biochar carbon credits. Biochar carbon credits represent a highly valuable type of carbon removal credits due to the potential of biochar to ensure permanent carbon sequestration for more than 100 years.

In implementing the Project, Sawa will rely on the Core Carbon Principles (CCP) established by the Integrity Council for the Voluntary Carbon Market (ICVCM).

Offset8 believes Indonesia has potential to play a pivotal role in global climate efforts. The Indonesia Carbon Exchange recently launched by the Indonesia Stock Exchange is a key initiative that should enable Indonesian companies to decarbonize their businesses and to achieve their net zero goals.

Offset8 and Sawa will work on ensuring that the Project complies with both Indonesian law and regulations and with internationally recognised carbon standard requirements, thereby enabling the Project to meet the requirements of the national and international carbon markets, including Article 6-eligible transactions.

Indonesia’s carbon pricing policies and supervision to be implemented by the country’s leadership will be imperative to contribute effectively to global climate targets. Offset8 believes Indonesia’s decisions on mutual recognition of the international carbon standards and increase of interoperability and interconnectivity with other markets could attract more international capital to help Indonesia achieve its national climate targets.

A profit-sharing arrangement, agreed upon by Offset8 and Sawa as a part of the Transaction, is designed to ensure that the local communities will receive socio-economic benefits from the sale of carbon credits and Project activities. Offset8 expects to establish presence in Indonesia to assist with the development and monitoring of the Project.

In addition, Offset8 has already received expressions of interest from companies based in the Middle East and in East Asia that look to use biochar carbon credits for voluntary or compliance purposes.

In connection with the Transaction, Offset8 Capital Limited has acted as a financial advisor to Offset8 Holding Limited that will finance the Project.

Phil Rickard, CEO and Founder of Sawa, emphasized, "Our collaboration with Offset8 enables Sawa to advance its commitment to mitigating climate change by harnessing carbon capture technology through the transformation of agricultural waste into biochar. Moreover, this partnership addresses the urgent global challenge of food security by producing a valuable soil amendment." He further highlighted, "Indonesia emerges as an ideal ally in implementing this innovative solution, given its agricultural landscape and commitment to sustainability."

Ivan Mozharov and Jules Maitrepierre, Co-founders and Executive Directors of Offset8 have said: “The financing of the Sawa project marks a milestone in our journey to facilitate the gobal transition towards a low-carbon economy. It reflects our belief in the power of partnership and innovation to address the pressing challenge of climate change. By converting agricultural waste into valuable carbon credits, we are not only preventing harmful emissions, but also paving the way for Indonesia to become a leader in the global carbon market.”

About Offset8
Offset8 Capital Limited is an Abu Dhabi Global Market-based proprietary asset management firm and a financial advisor regulated by the Financial Services Regulatory Authority of the ADGM.

Offset8 seeks to finance climate mitigation and adaptation projects, with focus on mangrove restoration, reforestation and biochar. Of particular relevance will be projects that aim to support local communities in Africa and Southeast Asia and to contribute to both environmental conservation and sustainable economic development.

Offset8 is a member of the UAE Carbon Alliance and the ASEAN Alliance on Carbon Markets.

About Sawa
Sawa EcoSolutions (based in Singapore), and its Indonesian operating arm, Legasi Alam Indonesia, were founded in 2021 and specialize in sustainable agricultural waste management in Indonesia. With a clear vision, the company aims to establish 100 production facilities across Southeast Asia, removing 1 million tonnes of carbon dioxide annually to combat climate change effectively. By harnessing the abundant agricultural residue biomasses in the region, Sawa not only addresses waste management challenges but also plays a crucial role in supporting food security by repurposing these resources.

This press release is for general informational purposes only and should not be relied upon for any other purpose. Notwithstanding anything contained in this press release, this press release does not constitute, and no reader of this press release may treat the same as, an offer to sell, a solicitation or invitation for the sale and purchase of any securities, instruments or any other properties, and the information contained in this press release shall not form the basis of any offer or contract. Under no circumstances is this press release to be construed as an offering of an interest in any collective investment fund in any jurisdiction. No action has been taken to permit an offering of interests in any collective investment fund in any jurisdiction where action for that purpose would be required.

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