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Publication - Research and analysis

Mobilising private investment in natural capital: report

Published
27 April 2023
From
Cabinet Secretary for Rural Affairs, Land Reform and Islands
Directorate
Agriculture and Rural Economy Directorate, +2 more … Environment and Forestry Directorate, International Trade and Investment Directorate
Topic
Economy, Environment and climate change, Farming and rural, +1 more … Money and tax
ISBN
9781805255673

This report looks at how to encourage responsible private investment into peatland restoration, including how to overcome barriers to scaling voluntary carbon markets to restore peatland in Scotland.

View supporting documents Supporting documents

Annex E: List of assumptions used in financial analysis

General Assumptions

Assumption

Value

Unit

Project Area

100

Ha

Project Length

50

Years

Weighted tCo2e benefit

3

TCo2e/ha/yr

Inflation

2.5

%

PIU price (Year 0)

20

£/PIU

Verification Premium

50

%

Carbon Price CAGR (yr 1-30)

3.5

%

Carbon Price CAGR (yr 31-50)

1.5

%

Capital Appreciation

1.5

%

Cost Assumptions provided by Peatland Action

Feasibility Study

27

£/ha

Project Design

130

£/ha

PC Registration / validation

2200

£/Site

Restoration cost

1900

£/ha

Dear Fencing installation

400

£/ha

Maintenance

73

£/ha/yr

Other Monitoring

6

£/ha/yr

Peatland Code Verification

1164

£/site (recurring)
Scenario A Assumptions

Assumption

Value

Unit

Capital Grant

2,479

£/ha

PIU Sales in Year 1

100

%
Scenario B specific Assumptions

Assumption

Value

Unit

Total Grant (NPV)

2,479

£/ha (NPV of grants)

Grant provided as capital

40

%

Grant provided for maintenance

60

%

Grant term

15

Years

Annual Grant value

99.16

£/ha/yr
Financing Assumptions

Loan Profile

Fully Amortising

Description

Loan Value

200,000

£

Tenor

25

Years

Interest rate

5.00

%

For further information on the contents of this document, please contact:

James Mansfield

Managing Director

James@Finance.Earth

Gail Hurley

Director of Advisory

Gail@Finance.Earth

Alicia Gibson

Senior Associate Director

Alicia@Finance.Earth

Yann Grandemange

Senior Associate

Yann@Finance.Earth

Alex Hume

Senior Associate

Alex@Finance.Earth

Fraser O’Halloran

Senior Analyst

Fraser@Finance.Earth

Peter Phillips

Head of Natural Capital Land

Management Policy

Peter.Phillips@gov.scot

Claire McFadden

Team Leader Peatlands and Land

Quality Unit

Claire.McFadden@gov.scot

Patrick Jean-Martell

Environmental Green Finance

Manager

patrick.jean-martel@nature.scot

Contact

Email: peter.phillips@gov.scot

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