Mr. Michael Costa reports

BASE CARBON PARTNERS WITH DEVELOPER OF CARBON REMOVAL PROJECTS

Base Carbon Inc. has executed an agreement, through its wholly owned subsidiary, Base Carbon Capital Partners Corp. (BCCPC), to facilitate the development of a nature-based carbon removal project, focused on the reforestation of degraded rural farmlands in the northern Indian state of Uttar Pradesh. Value Network Ventures Advisory Services Pte Ltd. ("VNV") is Base Carbon's Project development partner.

Highlights

Base Carbon, in partnership with VNV, to facilitate the planting of approximately 6.5 million trees on degraded rural farmlands and fertile but arid deserted lands in northern India.

Project implementation is already underway: approximately 2.5 million trees have been planted to date with the remaining 4 million trees expected to be planted by the end of 2023.

The Project is expected to generate over 1.6 million high-quality nature-based removal carbon credits issued in relatively equal tranches over an expected 20-year Project life. First issuance is expected in early 2025.

Initial Project capital expenditure of US$7.3 million anticipated to be drawn through Q1 2024 to capitalize the reforestation and associated agroforestry infrastructure with an additional US$6.3 million representing primarily maintenance capital to be deployed over a subsequent 10-year period to be funded by Base Carbon. Base Carbon anticipates reinvesting a portion of proceeds from Project credit sales to fund maintenance capital requirements.

Base Carbon will retain the right of first refusal on any expansions of the Project.

Designed with a prominent level of stakeholder engagement, this community-centric Project has a significant positive impact on local rural farming communities' food security, climate adaptation measures, and drought resilience, among several other co-benefits.

Founded in 2007, VNV's community-led programs on climate action have covered over 7 million rural households and encompass over 3 million hectares of forestry, agriculture & conservation efforts in 16+ countries.

Project and Investment Overview

Base Carbon, through its wholly owned subsidiary BCCPC, is diversifying its portfolio into carbon removal projects beginning with an afforestation, reforestation, and revegetation project (ARR) in India.

The Project engages smallholder farmer communities to plant approximately 6.5 million native and naturalized trees on degraded rural farmlands and fertile but arid deserted lands. Approximately 2.5 million trees have been planted to date, and a further 4 million trees are expected to be planted by the end of 2023.

The Project is expected to generate over 1.6 million carbon credits issued in relatively equal tranches over an estimated 20-year Project life. The Project is in development and is expected to be registered with Verra's VCS program in 2024 and Base Carbon will retain a right of first refusal on any expansions of the Project. A portion of proceeds from the sale of carbon credits will be reinvested into the Project, with first issuance of carbon credits expected in Q1 2025.

BCCPC is expected to advance a total of approximately US$13.6 million as a prepayment for the carbon credits in payment tranches over the next 10 years, with US$2.6 million having been deployed upon execution of the Project agreement with VNV, and aggregate of US$7.4 million by end of Q1 2024. The advance purchase price payment will primarily finance the establishment of the nursery and required infrastructure as well as certain costs related to Project monitoring. Certain prepayments will be conditional upon key development milestones and conditions, such as successful registration with Verra. Further capital commitments will be advanced along planting, maintenance and monitoring schedules tied to success-based operational and commercial milestones within the Project.

"This project represents an important next step in the evolution, development, and diversification of Base Carbon's portfolio. As our first carbon removals project we are thrilled with the quality of both the project itself, and our project partner, VNV. With the addition of this project to our portfolio, we continue to execute on a systematic and diligent approach to scaling our business and our capital allocations to the needs, demands, and future of carbon markets," stated Michael Costa, Chief Executive Officer of Base Carbon.

Project Details

The Project is located in the Uttar Pradesh state of India. Uttar Pradesh is the most populated state and one of the leading agriculture locales within India. While a vast majority of the population relies on agriculture for its livelihood, over 30% of the state's 200 million1 population is identified as "multidimensionally poor.2"

The Project plans include planting approximately 16 different species, selected through an inclusive community-led iterative process. The planting will include a variety of native and naturalized tree species, such as Citrus and Guava, as well as medicinal and culturally significant trees, such as Mahua trees.

The trees are expected to be planted primarily on smallholder lands of five hectares or less. The native and naturalized species of trees planted will sequester carbon from the atmosphere as they grow. In addition, as part of the Project's equitable benefit sharing mechanism, certain species of fruit and nut trees will be planted, providing income diversification and incremental revenue generating activities for those individuals and communities. The income-generating species planted will remain the property of the farm-owners in an evergreen manner.

The Project has been designed around the needs of local farming communities, with a high-level of stakeholder engagement, ownership, input, and feedback. Agroforestry projects are an essential strategy for smallholder farmers in India, to improve their long-term income generation and diversification, as well as building climate change resilience.

Development Partner

Founded in 2007, VNV has been at the forefront of the movement against climate change by conceptualizing, developing, and executing community-driven initiatives in the South Asian (India, Bangladesh, Nepal, Bhutan, Myanmar, Sri Lanka), Southeast Asian (Indonesia, Vietnam, Cambodia, Laos, Thailand, Timor Lest) & African (Tanzania, Ghana, Madagascar) landscapes. These community-led programs have impacted over 7 million rural households and cover over 3 million hectares under land use and forestry, among other mitigation and adaptation nature-based solutions which aim to restore ownership, dignity, improve livelihoods and foster resilience of first responding communities in least developed and developing nations of the Global South. VNV, also known as Value Network Ventures, believes in the power of convergence of multiple stakeholders including, but not limited to, the private sector, public sector, research institutions and collaboratives to create collective and thus significant impact. In this endeavor VNV engages businesses in achieving net neutrality targets while addressing issues of social responsibility and environmental sustainability along their supply chain through the implementation of such climate action projects in line with the Paris Agreement, Sustainable Development Goals (SDGs) as well as the Global Biodiversity Framework (GBF).

VNV is recognized by high-quality offtakers as a preferred partner and serves as an implementation partner to various governments, bilateral and multilateral agencies such as GIZ, IFC, GOI, WRG 2030 and LNFD, as well as being accredited by the International Carbon Reduction and Offsetting Accreditation ("ICROA"). Mr. Sandeep Roy Choudhury, the founder, and Director of VNV, is also on the ICROA Accreditation board, serves on the expert advisory group of VCMI (Voluntary Carbon Markets Initiative), is a board member with the center of integrity, transparency, and ethics of the UN Global compact, and is a recognized thought leader in the Voluntary Carbon Markets. For more information, please visit https://vnvadvisory.com/.

"This is a very exciting opportunity between our two firms. By pairing Base Carbon's valued financial structuring and capital markets knowledge with VNV's expertise in community-based carbon project development, we anticipate a successful partnership over the coming decades," stated Sandeep Choudhury, the founder and Director of VNV.

About Base Carbon

Base Carbon is a financier of projects involved primarily in the global voluntary carbon markets. We endeavor to be the preferred carbon project partner in providing capital and management resources to carbon removal and abatement projects globally and, where appropriate, will utilize technologies within the evolving environmental industries to enhance efficiencies, commercial credibility, and trading transparency. For more information, please visit www.basecarbon.com.

We seek Safe Harbor.