CrossBoundary will be the general partner and manager of the fund, with limited partners as investors in the fund. CrossBoundary targets a 50/50 debt-to-equity ratio, with a blended finance structure in the pilot fund. Projects may or may not have a special purpose vehicle outside the country of operations.
The portfolio will be owned by an offshore vehicle, HoldCo, which will have first rights to repayment from carbon credit sales revenues. To mitigate project and execution risks, a technical assistance fund will be capitalized to provide targeted support services to developers and local implementers.
Local communities and governments (where applicable) will share in the benefits of carbon credits sale. Through offtake agreements that better align incentives and achieve a higher carbon price, The Fund for Nature will increase the “size of the pie,” resulting in more revenue staying with local communities and partners. More equitable benefit-sharing also ensures the project’s long-term viability by aligning the incentives of all partners involved.