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Opna - CDR Financing Platform Interview

'Unbound Showcase' is a globe-spanning series of interviews with pioneers of carbon dioxide removal (CDR). We're questioning innovators, business leaders, policymakers, academics, buyers, and investors taking on the challenge of our lifetime—gigaton-scale carbon removal from the earth's atmosphere.
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What is Opna, and what inspired its creation?

Shilpika (Shilps) Gautam - The origins of Opna go back to a transformative expedition I embarked on in 2017 when I became the first person to stand-up paddle the entire 3,000km length of the River Ganges, highlighting the human experience of climate change and setting a Guinness World Record. This journey revealed the vast financing gap for high-quality climate projects, particularly in the Global South. Through discussions with non-profits, policymakers, project developers, and investors, I realised that carbon finance could significantly impact climate action, communities, and biodiversity, especially in plugging this vast gap (trillions of dollars) in the additional climate financing needed each year.

In 2022, I founded Opna with the vision of a thriving, equitable planet where anyone - companies or individuals - can build projects that contribute to a low-carbon economy while safeguarding our environment, communities, and biodiversity. To make this vision a reality, our mission is to unlock capital for high-quality climate projects that address climate change with speed, scale, and equity.

Fun fact: 'Opna' means to 'open' or 'to unlock' in the Nynorsk and Icelandic languages, and it also closely resembles the Hindi and Urdu word 'Apna,' which means 'ours' and points to the need for ownership and empathy as we create solutions for our planet and communities.

Given the significant potential of CDR projects, particularly in the Global South, how is Opna supporting project development and investment in these regions?

Shilpika (Shilps) Gautam - We work with companies who want to lead credible and timely climate action by catalysing high impact carbon projects. We provide access to a range of long-term commitment projects which not only remove carbon, but also drive positive change and have sincere and catalytic social and economic impact in their regions.

The focus on only long-term commitments (offtake agreements) ensures we unlock capital to fund emerging carbon projects, in order to lock in the high-quality carbon credits of the future. This strategy ensures that we are supporting project developers first, by funnelling investment into the regions that need it the most. The flow of finance from the Global North to the Global South is the backbone of Article 6, and of Opna.

Trust is of critical importance in the carbon credit market. How does Opna assure buyers that the carbon credits they purchase represent genuine and verifiable carbon removal?

Shilpika (Shilps) Gautam - There's been a shift from simply buying credits for last year's emissions to thinking about what the climate impact is going to be over the next 5-10 years. Best in class carbon removal which also has high impact is what we stand by, and therefore every project developer we work with must go through a rigorous process to ensure we only provide thoroughly-vetted, high quality and high impact carbon credits.

To do this we work with a world-class scientific and technical advisory board, and our due diligence framework is thorough and complex - it assesses project risks from a scientific, commercial, technical, and reputation perspective. We verify the integrity of information provided by suppliers and review all the risks associated with a project.

Projects that have passed our qualification stage - an initial assessment to understand a project developer's credibility and the suitability of the project as a financing opportunity - proceed to the due diligence framework. Only a small % of projects make it through to our L1 and L2 diligence.

The other point to note is that while due diligence helps in project selection, it only provides an 'at a point in time' picture of risk - for long-term purchasing contracts, especially where they involve the delivery of carbon removal several years from now - there needs to be ongoing monitoring and management of myriad risks - from contractual covenants to macros risks to risks pertaining to the projects progress, issuance and deliveries. At Opna, we support our customers all the way until the final credits are delivered via our contract and portfolio management offering - to help them mitigate and manage risks related to Carbon removal deliveries. One way to imagine this is to liken this to asset management of carbon removal projects.

Looking ahead, how do you see the financial landscape for CDR projects evolving in the next 3-5 years?

Shilpika (Shilps) Gautam - Carbon markets globally account for $800bn, but voluntary carbon action only accounts for about $2bn. For the carbon markets to take off, a few things need to align. First, you need supply and demand. Second, you need the right financial incentives. And third, you need the right policy structures in place. Right now, these different elements are out of alignment. Over the next 3-5 years, we need these elements to come together, and we need to move from voluntary action to compliance-based action.

In terms of the financial landscape for CDR projects specifically, we must provide the models and mechanisms to incentivise companies to contribute to CDR projects. For us, that means providing the opportunity and a platform for buyers of carbon removal to pool their carbon budgets together in order to catalyse the highest-impact carbon projects. We must funnel investment into a broad portfolio of solutions to minimise risk and ensure adequate funding to scale for the demand, given the limited supply of high-quality credits in 2030. But we must also focus our attention on the areas and regions which are hit the hardest by climate change, which means redirecting finance to primarily the Global South, where it can have a positive impact on the local economy and communities.

How does Opna align its activities with the United Nations Sustainable Development Goals (SDGs)? Can you provide specific examples of how Opna's work contributes to these goals?

Shilpika (Shilps) Gautam - Our work at Opna supports many of the SDGs. By facilitating the financing of carbon removal projects, we aim to support climate action by fighting global warming (SDG 13). With our focus on catalysing the highest impact carbon projects—i.e. projects which drive growth and have a positive social and economic impact on people and the planet, both on land and below water—we support SDG 8, 14 and 15. Through funnelling capital from the Global North to the Global South, we aim to reduce inequalities (SDG 10). Lastly, we are a female-founder-led company that strongly supports and advocates for gender equality and equal opportunities (SDG 5).

What's the biggest challenge facing CDR's nature-based/science-based solutions, and what is required to scale and solve them in 2024?

Shilpika (Shilps) Gautam - In the absence of clear policy directives, it's imperative that we support existing and upcoming buyers and investors or CDR on their purchase decisions - be it the quality of projects, verifiability of removal, and most importantly, what is the lasting/additional impact the project was able to create, and how that aligns to the business model and overall climate strategy of the buyers.

It is also pertinent that we offer buyers creative tools and financing structures, in order for them to support projects, but also build internal buy-in and secure appropriate budgets.

shilps@opna.earth
12
minute read
minute listen
September 19, 2024
Shilpika
Gautam
29 Jun 2024
Opna - CDR Financing Platform Interview

What is Opna, and what inspired its creation?

Shilpika (Shilps) Gautam - The origins of Opna go back to a transformative expedition I embarked on in 2017 when I became the first person to stand-up paddle the entire 3,000km length of the River Ganges, highlighting the human experience of climate change and setting a Guinness World Record. This journey revealed the vast financing gap for high-quality climate projects, particularly in the Global South. Through discussions with non-profits, policymakers, project developers, and investors, I realised that carbon finance could significantly impact climate action, communities, and biodiversity, especially in plugging this vast gap (trillions of dollars) in the additional climate financing needed each year.

In 2022, I founded Opna with the vision of a thriving, equitable planet where anyone - companies or individuals - can build projects that contribute to a low-carbon economy while safeguarding our environment, communities, and biodiversity. To make this vision a reality, our mission is to unlock capital for high-quality climate projects that address climate change with speed, scale, and equity.

Fun fact: 'Opna' means to 'open' or 'to unlock' in the Nynorsk and Icelandic languages, and it also closely resembles the Hindi and Urdu word 'Apna,' which means 'ours' and points to the need for ownership and empathy as we create solutions for our planet and communities.

Given the significant potential of CDR projects, particularly in the Global South, how is Opna supporting project development and investment in these regions?

Shilpika (Shilps) Gautam - We work with companies who want to lead credible and timely climate action by catalysing high impact carbon projects. We provide access to a range of long-term commitment projects which not only remove carbon, but also drive positive change and have sincere and catalytic social and economic impact in their regions.

The focus on only long-term commitments (offtake agreements) ensures we unlock capital to fund emerging carbon projects, in order to lock in the high-quality carbon credits of the future. This strategy ensures that we are supporting project developers first, by funnelling investment into the regions that need it the most. The flow of finance from the Global North to the Global South is the backbone of Article 6, and of Opna.

Trust is of critical importance in the carbon credit market. How does Opna assure buyers that the carbon credits they purchase represent genuine and verifiable carbon removal?

Shilpika (Shilps) Gautam - There's been a shift from simply buying credits for last year's emissions to thinking about what the climate impact is going to be over the next 5-10 years. Best in class carbon removal which also has high impact is what we stand by, and therefore every project developer we work with must go through a rigorous process to ensure we only provide thoroughly-vetted, high quality and high impact carbon credits.

To do this we work with a world-class scientific and technical advisory board, and our due diligence framework is thorough and complex - it assesses project risks from a scientific, commercial, technical, and reputation perspective. We verify the integrity of information provided by suppliers and review all the risks associated with a project.

Projects that have passed our qualification stage - an initial assessment to understand a project developer's credibility and the suitability of the project as a financing opportunity - proceed to the due diligence framework. Only a small % of projects make it through to our L1 and L2 diligence.

The other point to note is that while due diligence helps in project selection, it only provides an 'at a point in time' picture of risk - for long-term purchasing contracts, especially where they involve the delivery of carbon removal several years from now - there needs to be ongoing monitoring and management of myriad risks - from contractual covenants to macros risks to risks pertaining to the projects progress, issuance and deliveries. At Opna, we support our customers all the way until the final credits are delivered via our contract and portfolio management offering - to help them mitigate and manage risks related to Carbon removal deliveries. One way to imagine this is to liken this to asset management of carbon removal projects.

Looking ahead, how do you see the financial landscape for CDR projects evolving in the next 3-5 years?

Shilpika (Shilps) Gautam - Carbon markets globally account for $800bn, but voluntary carbon action only accounts for about $2bn. For the carbon markets to take off, a few things need to align. First, you need supply and demand. Second, you need the right financial incentives. And third, you need the right policy structures in place. Right now, these different elements are out of alignment. Over the next 3-5 years, we need these elements to come together, and we need to move from voluntary action to compliance-based action.

In terms of the financial landscape for CDR projects specifically, we must provide the models and mechanisms to incentivise companies to contribute to CDR projects. For us, that means providing the opportunity and a platform for buyers of carbon removal to pool their carbon budgets together in order to catalyse the highest-impact carbon projects. We must funnel investment into a broad portfolio of solutions to minimise risk and ensure adequate funding to scale for the demand, given the limited supply of high-quality credits in 2030. But we must also focus our attention on the areas and regions which are hit the hardest by climate change, which means redirecting finance to primarily the Global South, where it can have a positive impact on the local economy and communities.

How does Opna align its activities with the United Nations Sustainable Development Goals (SDGs)? Can you provide specific examples of how Opna's work contributes to these goals?

Shilpika (Shilps) Gautam - Our work at Opna supports many of the SDGs. By facilitating the financing of carbon removal projects, we aim to support climate action by fighting global warming (SDG 13). With our focus on catalysing the highest impact carbon projects—i.e. projects which drive growth and have a positive social and economic impact on people and the planet, both on land and below water—we support SDG 8, 14 and 15. Through funnelling capital from the Global North to the Global South, we aim to reduce inequalities (SDG 10). Lastly, we are a female-founder-led company that strongly supports and advocates for gender equality and equal opportunities (SDG 5).

What's the biggest challenge facing CDR's nature-based/science-based solutions, and what is required to scale and solve them in 2024?

Shilpika (Shilps) Gautam - In the absence of clear policy directives, it's imperative that we support existing and upcoming buyers and investors or CDR on their purchase decisions - be it the quality of projects, verifiability of removal, and most importantly, what is the lasting/additional impact the project was able to create, and how that aligns to the business model and overall climate strategy of the buyers.

It is also pertinent that we offer buyers creative tools and financing structures, in order for them to support projects, but also build internal buy-in and secure appropriate budgets.

Shilpika
Gautam
12
minute read
minute listen
September 19, 2024
Shilpika
Gautam
September 19, 2024

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