Caspian Debt focuses on sustainable farming with ‘climate-smart agriculture’ investments
Caspian Debt, a corporate lending financial services company supporting companies in the food and agri sector since 2014, is focusing on investing in companies that drive eco-friendly agricultural practices and envision a greener future with positive impact.
Avishek Gupta, Managing Director and Chief Executive Officer of Caspian Debt, who referred to this vertical of investment as “climate-smart agriculture”, said, “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 think that agri sector has a major role to play.”
Stating that increasing weather events, ranging from heat stress to wildfires, have made agriculture less predictable, he said, “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.”
Evaluating climate actions
In an online interaction with businessline, he said Caspian Debt invests in climate-smart agriculture companies that actively contribute to reducing or replacing carbon footprints. Its credit assessment involves evaluating the climate actions of its companies and encouraging them to adopt climate-smart practices.
“We engage our customers by monitoring these outcomes and request them to report relevant information. Moreover, we have embedded such covenants in our offerings to help companies understand the importance of these initiatives,” he said.
Through its podcast ‘Caspian Climate Conversations’, the lender invites its portfolio companies to share their perspectives.
Caspian Debt is committed to measuring financed emissions of its portfolio. “Our intention is that we will use this data over time to build a less emission-intensive portfolio and a climate-resilient portfolio. We intend to build dedicated blended finance facilities,” he said.
55 firms funded
When asked how different Caspian Debt from other lenders, he said, “Our ability to lend amounts of up to ₹15 crore without mortgage collateral and to companies that are yet to make profits differentiates us from traditional lenders. Our ability to start working early with companies with loan sizes as small as ₹50 lakh and offering a variety of loan products such as plain vanilla term loans, revolving facilities, venture debt, purchase order financing and loans with custom repayment schedules, differentiates us from venture debt players.”
About the funding till now, he said nearly 55 companies operating in the food and agri supply chain have been funded to the tune of around ₹873 crore (as on August 1) since 2014. In 2023-24, the company funded to the tune of ₹159.3 crore.
On the types of debt products sought by the companies, he said the most requested loan type is a revolving working capital financing facility. This revolving facility addresses gaps in working capital by financing needs such as purchase orders and other operational requirements. “Approximately 80 per cent of the companies in our agriculture portfolio are benefiting from the revolving facility structure, and we continually do enhancement of the facility based on our ongoing credit assessments. Several of these companies have been given both a working capital line and a term loan structure for their financing needs,” he said.