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Inside Mirova's $30M Soil Carbon Prepurchase: What Project Developers Need to Know

How Varaha's 18-Month Due Diligence and Early Farmer Onboarding Secured the Largest Soil Carbon Investment Ever

Mahmoud Mobir••12 min read

Executive Summary

In November 2025, Mirova—a Paris-based sustainable investment firm managing over $35 billion—closed a $30 million prepurchase agreement with Varaha for carbon credits from a regenerative agriculture project spanning Northwest India. This deal represents the largest known soil carbon project investment in history and Mirova's first carbon transaction in the Asia-Pacific region.

For carbon project developers, this transaction offers critical insights into what it takes to secure large-scale financing in an increasingly sophisticated market. The deal took 18 months from initial due diligence to final signing—nearly double Mirova's typical 6-10 month timeline—and required Varaha to demonstrate significant on-the-ground traction before funding materialized.

Key takeaways for developers:

  1. Scale requires patience — Larger projects demand proportionally longer due diligence periods. Expect 12-18+ months for transactions above $20M.
  2. Early-stage capital is a competitive advantage — Varaha invested company equity to onboard 26,000 farmers before the deal closed, demonstrating viability and reducing investor risk.
  3. Team adaptability matters as much as methodology — Charlotte Lehmann, Mirova's Senior Investment Director, emphasized that Varaha's responsiveness during due diligence was key to forming the partnership.
  4. Soil carbon is investable at scale — This transaction proves that smallholder regenerative agriculture projects can attract institutional capital when designed with rigor.

1. The Deal Structure: Prepurchase as Growth Capital

Unlike traditional equity investments, Mirova's $30 million commitment is structured as a project-level prepurchase agreement for future carbon credits. This approach provides upfront capital to Varaha without diluting equity, while giving Mirova access to a pipeline of high-integrity soil carbon credits at pre-agreed pricing.

1.1. Why Prepurchase Matters for Project Economics

Prepurchase agreements solve a fundamental challenge in carbon project development: the capital-intensive upfront phase. Regenerative agriculture projects require:

  • Farmer recruitment and training infrastructure
  • Extensive baseline soil sampling (Varaha collected thousands of samples across 200,000+ hectares)
  • Digital monitoring systems for MRV (Monitoring, Reporting, Verification)
  • Multi-year waiting periods before first credits are issued (typically 2-3 years for soil carbon)

By providing capital before credits are generated, Mirova enables Varaha to scale from 200,000 hectares to a target of 675,000 hectares and 337,000+ farmers—a 3x expansion of the project's footprint.

1.2. Investment Terms: What We Know

While the full contract terms remain confidential, key disclosed details include:

  • $30 million total commitment — Structured as milestone-based disbursements tied to project expansion and verification milestones
  • Multi-year delivery schedule — Credits will be delivered over several years as farmers complete crediting periods
  • VM0042 methodology — Verra's Improved Agricultural Land Management v2.2, one of only two soil carbon methodologies to receive ICVCM CCP approval (as of October 2025)
  • CCB certification target — Project is pursuing Climate, Community & Biodiversity Standards to validate social co-benefits

Developer insight: Mirova's willingness to commit $30M to a soil carbon project using VM0042 reflects confidence in the methodology's durability. This is particularly significant given ongoing debates around soil carbon permanence. The recent ICVCM approval of VM0042 (with 40-year permanence requirements for CAR's protocol) suggests institutional buyers are increasingly comfortable with ag-based removals when paired with long-term monitoring commitments.

2. The 18-Month Due Diligence: What Took So Long?

The 18-month due diligence timeline is one of the most instructive aspects of this deal. According to the Mirova team, the extended period was driven by the project's scale and complexity—not red flags or deal-breaking issues.

2.1. What Gets Scrutinized in Large-Scale DD

For a transaction of this magnitude, due diligence extends far beyond standard carbon accounting verification. Institutional investors like Mirova evaluate:

Technical carbon integrity:

  • Baseline soil carbon measurements and sampling density
  • Additionality demonstration (proving practices wouldn't happen without carbon finance)
  • Model calibration for regional soil types and climate (critical for VM0042 accuracy)
  • Leakage risk assessment (ensuring farmers don't simply shift intensive practices elsewhere)
  • Permanence safeguards and reversal risk mitigation

Operational execution risk:

  • Farmer recruitment pipeline and retention strategies
  • Local partner relationships and community acceptance
  • Digital MRV platform scalability and data quality
  • Agronomic support infrastructure (training, inputs, extension services)
  • Revenue-sharing mechanisms and benefit distribution to farmers

Financial and legal:

  • Credit delivery risk and contractual protections
  • Regulatory compliance in India (including land rights and environmental permits)
  • Counterparty credit risk (Varaha's financial stability)
  • Exit scenarios and force majeure provisions

2.2. The Data That Matters Most

According to industry sources, one of the most time-consuming aspects of soil carbon DD is validating the soil carbon model calibration. VM0042 allows projects to use modeled estimates (rather than measuring every field annually), but this requires:

  1. Dense baseline sampling — Varaha collected thousands of soil samples across diverse soil types in Haryana and Punjab
  2. Regional model parameterization — Calibrating models like DayCent or RothC to local conditions
  3. Uncertainty quantification — Conservative estimates to account for spatial variability

The fact that Varaha invested in this data before securing the Mirova deal likely accelerated the final stages of DD and demonstrated technical sophistication to investors.

2.3. Actionable Takeaway: Plan for 12-18 Months on Large Deals

If you're pursuing prepurchase agreements above $10-20M, budget for:

  • 6-9 months for initial technical and commercial DD
  • 3-6 months for legal documentation and negotiation
  • 3-6 months for investor internal approvals and committee processes

This means you need runway capital to sustain operations during the DD period. Varaha's use of company equity to fund early development was critical to avoiding a "chicken and egg" problem.

3. The Power of Early Traction: 26,000 Farmers Before Deal Close

Perhaps the most instructive aspect of this deal is what Varaha accomplished before securing the Mirova investment. By the time the contract was signed, Varaha had already:

  • Onboarded 26,000 smallholder farmers across Haryana and Punjab
  • Enrolled over 200,000 hectares of farmland
  • Collected thousands of baseline soil samples
  • Calibrated soil carbon models for the region
  • Demonstrated farmer adoption of regenerative practices

3.1. Why This Mattered to Mirova

From an investor's perspective, Varaha's early traction de-risked several critical assumptions:

Farmer adoption risk: Smallholder agriculture projects often struggle with farmer recruitment and retention. By demonstrating that 26,000 farmers were willing to adopt new practices before carbon payments materialized, Varaha proved the value proposition beyond carbon credits (e.g., yield improvements, cost savings, agronomic benefits).

Operational scalability: Managing 26,000 farmers requires sophisticated field operations, digital systems, and local partnerships. Proving this at 200,000 hectares gave Mirova confidence in the 3x scale-up to 675,000 hectares.

Technical credibility: The extensive soil sampling and model calibration work demonstrated Varaha's technical rigor and commitment to high-integrity carbon accounting.

3.2. The Equity-Funded Development Strategy

Varaha's approach—using company equity to fund early project development—is increasingly common among successful carbon developers. This strategy:

  • Allows the company to move quickly without waiting for offtake commitments
  • Demonstrates conviction to potential investors
  • Accelerates due diligence by providing real data instead of projections
  • Strengthens negotiating position on pricing and terms

For developers: This underscores the importance of early-stage fundraising. Whether through venture capital, impact investors, or concessional finance, securing capital for project development before carbon sales is increasingly a requirement for large-scale success.

3.3. The Mirova Deal Enables 3x Expansion

With the $30M prepurchase in place, Varaha can now scale the Kheti project to:

  • 337,000+ farmers (13x the initial cohort)
  • 675,000 hectares (3.4x the initial area)
  • Multiple crediting vintages over the coming decade

This illustrates the "prove it, then scale it" model that is becoming standard in carbon finance: use equity to prove viability at 10-20% of target scale, then secure prepurchase or debt financing to reach full scale.

4. The Team Dynamic: Why Adaptability Matters

Charlotte Lehmann, Mirova's Senior Investment Director for Natural Capital, highlighted an often-overlooked factor in deal success: the way a team responds during due diligence.

4.1. What "Good" Looks Like in Due Diligence

According to Lehmann and other carbon investors, the due diligence process is as much about relationship building as technical validation. What stands out:

Responsiveness to questions: Deals often involve complex technical questions that don't have immediate answers. Teams that dig in and explore solutions rather than deflecting or over-promising tend to build stronger investor confidence.

Willingness to adapt: Investors may identify risks or suggest operational improvements. Teams that view this as collaboration rather than criticism are more likely to form long-term partnerships.

Transparency about uncertainties: No project is perfect. Teams that acknowledge risks and present mitigation strategies are viewed as more credible than those that downplay challenges.

Long-term thinking: Investors like Mirova are seeking multi-decade partnerships, not one-off transactions. Demonstrating alignment on impact goals and co-benefits (beyond carbon) strengthens relationships.

4.2. The Varaha Team's Differentiation

While specific details remain private, public statements suggest that Varaha's team—led by MD & CEO Madhur Jain—stood out for their:

  • Technical depth — Varaha employs agronomists, MRV specialists, and data scientists who could engage substantively with Mirova's technical advisors
  • On-the-ground credibility — The team's existing relationships with 26,000 farmers demonstrated operational excellence
  • Strategic vision — Positioning regenerative agriculture as a "cornerstone of India's climate strategy" showed ambition beyond a single project

4.3. Lessons for Project Developers

When entering due diligence with institutional investors:

  • Expect tough questions — View them as opportunities to demonstrate depth, not attacks
  • Don't overpromise — Conservative projections with clear upside scenarios are more credible than aggressive forecasts
  • Build trust through data — Real operational data (even if imperfect) is more valuable than polished projections
  • Think partnership, not transaction — Investors like Mirova want to support projects for 10-20+ years; demonstrate alignment on long-term goals

5. Market Implications: Soil Carbon Is Now Bankable

The Mirova-Varaha deal sends a clear signal to the carbon markets: soil carbon projects can attract institutional-scale capital when designed with integrity.

5.1. Why This Deal Matters for Soil Carbon as an Asset Class

Soil carbon has historically faced skepticism from buyers due to:

  • Permanence concerns — Soil carbon can be easily reversed if practices change
  • Measurement uncertainty — Soil heterogeneity makes accurate accounting expensive
  • Additionality questions — Many regenerative practices have agronomic benefits beyond carbon, raising questions about whether carbon finance is truly necessary

The Mirova-Varaha deal addresses these concerns through:

  • Rigorous methodology — VM0042 v2.2 with ICVCM CCP approval
  • Scale and data — Thousands of soil samples and model calibration reduce uncertainty
  • Long-term commitment — Multi-decade monitoring and farmer support infrastructure
  • Revenue sharing — Direct farmer payments create financial incentives beyond agronomic benefits

5.2. Smallholder Agriculture Projects Can Scale

One of the most significant aspects of this deal is that it involves smallholder farmers rather than large commercial operations. This demonstrates that:

  • Digital MRV platforms can manage tens of thousands of small plots efficiently
  • Aggregation models (bringing together many small farmers) can achieve institutional scale
  • Co-benefits (livelihoods, gender inclusion, ecosystem health) strengthen the investment case

This has implications for climate justice and equitable value distribution. Rather than concentrating carbon revenues in large industrial agriculture, models like Varaha's can channel significant capital to vulnerable rural communities.

5.3. Geographic Expansion: Asia-Pacific as Next Frontier

Mirova's statement that this deal "opens up new avenues to scale high-integrity nature-based investments across the Asia-Pacific region" suggests more deals are coming in countries like:

  • India — Massive agricultural base, government support for regenerative practices
  • Indonesia — Both agriculture and forestry opportunities; recent regulatory reforms (Reg 110/2025) improving investment climate
  • Thailand, Vietnam, Philippines — Large smallholder populations and growing climate commitments

For developers operating in Asia-Pacific, this deal validates the region's potential and may accelerate investor interest.

6. Strategic Takeaways for Carbon Project Developers

6.1. The "Prove-Then-Scale" Playbook

Varaha's success illustrates a clear path for ambitious developers:

  1. Seed/Series A (Years 1-2): Raise equity capital to fund pilot development (5,000-25,000 farmers, 50,000-200,000 hectares for agriculture projects)
  2. Demonstrate viability (Years 2-3): Prove farmer adoption, collect baseline data, begin verification processes
  3. Secure prepurchase (Years 3-4): Use pilot results to negotiate large-scale offtake agreements ($10-50M+)
  4. Scale to target (Years 4-10): Deploy prepurchase capital to reach full project scale and deliver credits over time

6.2. What Makes a Project "Investable" in 2025

Based on this deal and broader market trends, institutional investors are looking for:

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, agronomy/forestry, and operations
  • Collaborative approach during due diligence
  • Long-term vision aligned with investor goals

6.3. Soil Carbon vs. Other Nature-Based Solutions

How does this deal compare to pricing and structures for other NBS projects?

| Project Type | Typical Price Range | Scale Required | Key Risks | | --- | --- | --- | --- | | Soil Carbon (Ag) | $15-30/tonne | 100k+ hectares | Permanence, practice reversal | | ARR (Reforestation) | $20-40/tonne | 10k+ hectares | Fire, illegal logging, long project cycles | | IFM (Forest Management) | $15-25/tonne | 25k+ hectares | Baseline setting, leakage | | REDD+ (Avoided Deforestation) | $8-18/tonne | 50k+ hectares | Additionality debates, governance | | Biochar | $100-200+/tonne | 10k+ tonnes/yr production | Production costs, feedstock supply |

Soil carbon sits in the "sweet spot" of being more scalable than biochar but commanding higher prices than REDD+ (due to removal vs. avoidance premium). The Mirova deal validates this positioning.

6.4. What's Next: Following Mirova's Lead

Other institutional investors likely watching this deal closely include:

  • Microsoft Climate Innovation Fund — Active in soil carbon, recently invested in Soil Capital and other ag tech
  • Breakthrough Energy Ventures — Focus on scalable climate solutions
  • BeZero Carbon — Ratings firm turned investor, evaluating soil carbon opportunities
  • Asian Development Bank — Increasing focus on nature-based solutions in Asia-Pacific

If Varaha successfully delivers on this contract, expect a wave of similar deals in soil carbon over the next 12-24 months.

Conclusion: The New Standard for Carbon Project Finance

The Mirova-Varaha $30M prepurchase represents a maturation of the carbon project finance market. Gone are the days when a polished pitch deck and methodology document could secure large-scale funding. Institutional investors now expect:

  • Operational proof points before committing capital
  • Extensive due diligence proportional to deal size
  • High-integrity methodologies with third-party validation
  • Strong teams that can execute over decades

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?

Key Numbers

  • $30 million — Total prepurchase commitment from Mirova
  • 18 months — Due diligence timeline (vs. typical 6-10 months)
  • 26,000 — Farmers onboarded before deal closed
  • 200,000+ hectares — Initial project scale at signing
  • 337,000+ — Target number of farmers after scale-up
  • 675,000 hectares — Target project area (3.4x initial scale)
  • $350 million — Mirova's total NBS commitments since 2020
  • VM0042 v2.2 — Verra methodology with ICVCM CCP approval

This deep dive synthesizes public statements from Mirova and Varaha, industry research, and market analysis to extract actionable insights for carbon project developers.