EIB loans to strengthen competitiveness in agriculture sector
The lending institution of the European Union said loans are expected to back close to €1bn of investment across Europe by private cooperatives and companies.
It added the action will improve company’s long-term ability to invest in innovation and develop and market higher added-value products and services.
The bio-economy sector includes the chain of production and the processing of food, material and energy using renewable biological resources from land and sea.
Boost to jobs and growth
Phil Hogan, European Commissioner for agriculture and rural development, said it will provide a €1bn boost to jobs and growth in the region's rural economy.
“Facilitating access to finance to unlock investment in the agriculture sector is crucial to maintaining Europe's position as the global leader of high-quality, safe food products.”
Projects allocated under the programme loan will be implemented in 2018-2022.
EIB said the agriculture and bio-economy sector is mainly made up of companies and cooperatives with relatively small investments, which are difficult to target with direct lending.
The EIB already supports implementation of smaller projects by farmers and small and medium-sized enterprises in bio-economy value chains through commercial banks across Europe.
The bank, owned by the EU Member States, issued 11,000 loans worth €1.3bn to agriculture and fisheries last year.
Enhance competitiveness
EIB president Werner Hoyer said the agriculture and bioeconomy value chains are key drivers of Europe’s economy.
“With this new initiative, the EIB is seeking to strengthen its support for the sector. I believe that this dedicated programme loan will enhance competitiveness and that it has the potential to create future-oriented jobs in predominantly rural areas and smaller towns all over the continent,” he said.
“In this way, it may contribute to mitigating rural-urban migration and – together with other measures and projects, will address the issue of the rural depopulation by supporting rural and regional economic development.”
The lending programme constitutes an initial, replicable EIB pilot that will enable direct lending for private sector investments (from €15m to €200m) with a loan amount ranging from €7.5m to €50m.
It will be guaranteed by the EU budget under the European Fund for Strategic Investments (EFSI), which forms part of the ‘Investment Plan for Europe’ under the Juncker administration.
Andrew McDowell, EIB VP responsible for bioeconomy, said with the programme loan it can expect to support more than €850m worth of investments in the sector across Europe.
“This programme loan will address the market weaknesses that currently constrain many of the companies active in the agriculture and bioeconomy sector by accelerating and further mobilising private investments. It will enable the EU bank to expand and diversify its financing offer and reach out to new project promoters,” he said.
“The promotion of bioeconomy value chains, for example in food and forestry-based industries, is key to achieving EU and Sustainable Development Goal (SDG) objectives on the environment and the low carbon/’green’ economy.”
