The President of the European Investment Bank Group (EIB), Nadia Calviño, recently unveiled a substantial financing package totaling €3 billion aimed at enhancing agriculture, forestry, and fishing throughout Europe. This initiative is complemented by measures to bolster agricultural insurance. The loans from the EIB Group will be matched by other financial institutions, resulting in a total investment of around €8.4 billion for the bioeconomy sector.
This financing package represents the EIB’s largest effort in support of European agriculture and is specifically directed towards small and medium-sized enterprises (SMEs) and mid-cap companies. Over the next three years, the funds will be allocated, with the initial loans anticipated to be finalized in the first half of 2025.
A segment of the loan funds will be designated for young or new farmers, who often face challenges in securing traditional bank financing. The initiative also emphasizes support for women farmers, aiming to rectify gender disparities in the agricultural sector, and promotes green investments aligned with the European Union’s sustainability objectives.
“Agriculture plays a vital role in European life and is crucial to our economy and security. The financing announced today by the EIB Group will help ensure a promising future for a new generation of farmers and businesses in the agri-food sector and the bioeconomy,” stated EIB President Nadia Calviño at the EU Agri-Food Days conference in Brussels.
Agriculture and Food Commissioner Christophe Hansen expressed his support, saying, “The EIB’s strong commitment to aiding the EU’s rural community, especially young and women farmers, is commendable. Addressing the financing gap in this sector is essential, and with the EIB Group’s help, we are providing agriculture the resources it needs to thrive. We will closely collaborate with the EIB to maximize the benefits of this financing opportunity, ensuring a sustainable future for the sector.”
The new funding will facilitate investments in various activities, including soil health improvement, digital agricultural tools, water management strategies, and climate change resilience initiatives. It also aims to enhance education in sustainable farming methods and assist young or new farmers in land acquisition, thereby increasing the percentage of European farmers under 40 years old (12%) and the representation of women in agriculture (31.6%).
EIB Vice President Gelsomina Vigliotti remarked, “We are expanding our support for agriculture and the bioeconomy through a diverse array of innovative tools.” By collaborating with partners across the agricultural value chain, the EIB aims to tackle the sector’s challenges, including producing affordable food, supporting rural livelihoods in the context of climate change, and conserving the environment and natural resources.
To facilitate favorable lending conditions, the package includes provisions for interest rate subsidies or capital grants from EU and national budgets. Participating financial institutions will also benefit from advisory support through the Green Gateway programs and the Green Eligibility Checker, an online tool designed to assess the eligibility and climate impact of green investment proposals.
In its commitment to enhancing support for the bioeconomy, the EIB Group is also looking into improving agricultural insurance solutions to address the growing incidence of extreme weather events like floods and droughts. This effort involves collaboration with the European Commission, the insurance sector, and other stakeholders to explore ways to strengthen existing insurance frameworks and implement pan-European measures that promote climate adaptation investments and provide better liquidity and credit risk coverage for businesses affected by climate-related disasters.
These initiatives are part of the EIB Group’s strategic action plan established within the “Strategic Dialogue for the Future of EU Agriculture,” which was initiated by European Commission President Ursula von der Leyen in January 2024. This dialogue serves as a forum for creating a shared insight and vision for the future agricultural and food systems in the EU.
The EIB Group plans to collaborate closely with the European Commission to execute this plan, with the aim of maximizing public investment sources, leveraging private capital, and simultaneously mitigating risks for private investments in the agricultural domain.
The EIB Group’s action plan further encompasses:
– A venture debt program to provide loans to innovative companies in the agricultural value chain, particularly those involved in new technologies and sustainable biofuels or biomaterials.
** Guarantee schemes that may utilize the European Agricultural Fund for Rural Development (EAFRD) and/or national resources as part of Common Agricultural Policy strategic plans.
– A private equity program designed to support European fund managers focusing on innovative agricultural technologies and solutions, attracting private investors.
– An expanded scope of direct lending to medium and large entities, including not just cooperatives but also other farming organizations, irrigation communities, and associations for managing infrastructure such as dams and levees.
– Increased investment in rural infrastructure, including road networks, education, and agricultural water management.
(12/12/2024)
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