Aavishkaar Group looks to balance long-cycle carbon play with faster-return bets

Impact investor Aavishkaar Capital is increasingly looking to complement its long-cycle carbon bets with newer, faster-return climate opportunities—areas where capital can turn over quicker, risks are easier to price, and revenues don’t hinge on 20-year biological curves. The shift comes even as the impact investor continues to build out its permanent capital vehicle for carbon sequestration, incorporated in 2024 as Aavishkaar Carbon, the firm’s founder, Vineet Rai and Santosh Singh, managing director at Intellecap, the advisory arm of The Aavishkaar Group, told Mint in a joint interview.Aavishkaar Carbon was set up to invest in growing trees on Indian farms to promote carbon sequestration and monetise it through the carbon trade market.

Sequestration is the process of capturing and storing carbon, and a permanent vehicle has unlimited tenure.The firm has received $150 million in soft commitments from global companies, including oil majors and technology firms, interested in purchasing carbon credits generated from these projects to offset their emissions. Carbon credits trade between $15 and $100 in global markets, with ‘high-integrity’ credits commanding a premium.The strategy involves working with small landowners to increase tree cover and density, including planting native species such as sal and teak across 5,000–10,000 acres.

Aavishkaar is running two pilot projects in West Bengal and Jharkhand.Initially, small landowners are typically compensated through fixed payments, input support and intercropping income, with carbon revenue sharing kicking in later as sequestration increases.The firm had earlier explored launching a $350–500 million closed-end fund for carbon sequestration in 2022, Mint had reported. While