Inside Mirova's $30M Soil Carbon deal with Varaha

Overview

Mirova (Paris-based sustainable investment firm) just closed a $30 million prepurchase agreement with Varaha for soil carbon credits from a regenerative agriculture project in Northwest India.

Why it matters: This is the largest known soil carbon project investment in history and Mirova's first carbon deal in Asia-Pacific.

5 Critical Insights for Carbon Project Developers

1. Scale Requires Extended Due Diligence

The timeline: 18 months from initial DD to final signing—nearly 3x longer than Mirova's typical 6-10 month process.

Why: Project size and complexity required extensive validation of:

• Soil carbon model calibration across diverse soil types

• Farmer recruitment scalability (26,000 farmers onboarded)

• MRV platform robustness

• Long-term monitoring commitments

Action for developers: If you're pursuing prepurchase deals >$10-20M, budget 12-18+ months for DD. You need runway capital to sustain operations during this period.

2. Early-Stage Traction Is Non-Negotiable

What Varaha did before the deal closed:

• Onboarded 26,000 farmers across 200,000+ hectares

• Collected thousands of baseline soil samples

• Calibrated soil carbon models for Haryana/Punjab regions

• Demonstrated farmer adoption of regenerative practices without carbon payments

Why this mattered:

• De-risked farmer adoption assumptions

• Proved operational scalability

• Provided real data instead of projections

• Strengthened negotiating position

Action for developers: Use equity capital (VC, impact investors, concessional finance) to prove viability at 10-20% of target scale. Then secure prepurchase agreements to reach full scale.

The playbook:

1. Years 1-2: Raise equity for pilot (5K-25K farmers for ag projects)

2. Years 2-3: Demonstrate viability, collect baseline data

3. Years 3-4: Secure prepurchase using pilot results ($10-50M+)

4. Years 4-10: Scale to target and deliver credits

3. Team Dynamics Matter as Much as Methodology

Quote from Charlotte Lehmann (Mirova's Senior Investment Director):

What "good" looks like in DD:

• Responsiveness: Digging into complex questions without deflecting or overpromising

• Transparency: Acknowledging risks and presenting mitigation strategies

• Collaboration: Viewing investor feedback as partnership, not criticism

• Long-term thinking: Demonstrating alignment on impact goals beyond carbon

Action for developers: Build trust through real operational data (even if imperfect) rather than polished projections. Conservative estimates with clear upside scenarios are more credible than aggressive forecasts.

4. Soil Carbon Is Now Institutionally Bankable

How this deal addresses historical skepticism:

Permanence concerns → VM0042 v2.2 methodology with ICVCM CCP approval + multi-decade monitoring

Measurement uncertainty → Thousands of soil samples + regional model calibration = reduced uncertainty

Additionality questions → Revenue-sharing mechanism creates financial incentives beyond agronomic benefits

Market positioning:

Soil carbon sits in the "sweet spot": More scalable than biochar, commanding higher prices than REDD+ (removal vs. avoidance premium).

5. Smallholder Projects Can Attract Institutional Capital

Why this matters:

✅ Digital MRV platforms can manage tens of thousands of small plots efficiently

✅ Aggregation models can achieve institutional scale

✅ Co-benefits (livelihoods, gender inclusion, ecosystem health) strengthen investment case

✅ Climate justice: Carbon revenues flow to vulnerable rural communities, not just industrial agriculture

Scale achieved:

• Initial: 26,000 farmers, 200,000 hectares

• Target (post-investment): 337,000+ farmers, 675,000 hectares (3x expansion)

What Makes a Project "Investable" in 2025

Based on this deal and broader market trends, institutional investors expect:

High-Integrity Methodology

• ICVCM CCP-approved methodologies (or clear path to approval)

• Conservative accounting approaches

• Third-party verification by accredited VVBs

Operational Track Record

• Demonstrated farmer/community adoption

• Functional MRV systems with real data

• Local partnerships and social license

Scalability and Impact

• Ability to deliver millions of tonnes over project lifetime

• Clear co-benefits (biodiversity, livelihoods, water, etc.)

• Alignment with national climate goals or NDCs

Strong Team

• Technical depth in carbon accounting and operations

• Collaborative approach during due diligence

• Long-term vision aligned with investor goals

Strategic Context: Asia-Pacific as Next Frontier

Mirova's statement: This deal "opens up new avenues to scale high-integrity nature-based investments across the Asia-Pacific region."

What this means: More deals are coming in:

• India — Massive agricultural base, government support for regenerative practices

• Indonesia — Recent regulatory reforms (Reg 110/2025) improving investment climate

• Thailand, Vietnam, Philippines — Large smallholder populations and growing climate commitments

Mirova's NBS track record: $350M+ mobilized since 2020 from corporate partners

Key Numbers

• $30 million — Total prepurchase commitment

• 18 months — Due diligence timeline (vs. 6-10 months typical)

• 26,000 — Farmers onboarded before deal closed

• 200,000+ hectares — Initial project scale

• 337,000+ — Target farmers after scale-up (13x growth)

• 675,000 hectares — Target area (3.4x expansion)

• VM0042 v2.2 — Verra methodology with ICVCM CCP approval

• $350M — Mirova's total NBS commitments since 2020

Bottom Line for Project Developers

The market has matured. Polished pitch decks are no longer enough. Institutional investors now require:

1. ✅ Operational proof points before committing capital

2. ✅ Extensive due diligence proportional to deal size

3. ✅ High-integrity methodologies with third-party validation

4. ✅ Strong teams that can execute over decades

The opportunity: For developers willing to invest in early-stage development, collect robust data, and build strong partnerships, the rewards are significant—multi-million dollar prepurchase agreements that enable transformative scale.

Varaha's success offers a roadmap. The question is: who will follow it?

Want the full deep dive?

This is just a summary. The full article on vcm.fyi includes:

• Detailed breakdown of the 18-month DD process

• What gets scrutinized in large-scale due diligence

• How to structure prepurchase agreements

• Comparison with other NBS pricing and structures

• What other institutional investors are watching

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Tags

#SoilCarbon #Prepurchase #ProjectDevelopment #RegenerativeAg #India #Mirova #Varaha #CarbonFinance #Smallholder #InstitutionalCapital