The European Investment Bank (EIB) Group has announced a €3 billion financing package for agriculture, forestry and fisheries across Europe, along with moves to bolster farm insurance.
EIB Group offers €3 billion in loans for agriculture and other bioeconomy activities across Europe, with a focus on young farmers, gender equality and green investments.
The new financing aims to spur investments in a range of activities, including soil health, digital tools, water management and climate resilience.
It is also intended to bolster training in sustainable farming practices and the purchase of land by young or new farmers, helping to boost the 12% share of EU farmers who are under the age of 40 and the 31.6% share who are women.
These EIB Group loans will be matched by other participating financial institutions, unlocking close to €8.4 billion of long-term investments for the bioeconomy sector.
The support marks the largest EIB-backed financing initiative for European agriculture, and will be directed towards small and medium-sized enterprises (SMEs) as well as mid-caps (250-3,000 employees).
EIB loans for agriculture
The financing package announced by EIB Group president Nadia Calviño will be spread over the next three years, with the first loans due to be signed in the first half of 2025.
A share of the loans will be earmarked for young or new farmers because they generally have “more trouble” obtaining traditional bank financing, according to EIB Group.
The support will also target female farmers to overcome a gender imbalance in agriculture as well as green investments to help farmers make the green transition a success, in support of EU sustainability goals.
Commissioner for Agriculture and Food, Christophe Hansen said: “I welcome the strong commitment of EIB in favour of the EU farming community, especially for young farmers and women farmers.
“Bridging the financing gap in the sector is vital, and with the EIB Group’s support we are giving agriculture the tools to thrive and grow.
“We will closely work with the EIB to make sure that this financing opportunity is taken up on the ground and delivers results. Together, we’re securing a sustainable future for the sector.”
EIB Group is also working with the European Commission to develop “new forms” of agricultural insurance and de-risking schemes against extreme weather events.
The EIB Group president said its investments are a part of a holistic approach, working with the commission, to support innovation and help build the sustainability and resilience of small businesses involved in the bioeconomy and agriculture sectors.
The announced EIB Group action plan also includes:
- A venture debt programme, which will provide loans to innovative companies along the agricultural value chain working on, for example, new technologies, the development of payment for ecosystem services or sustainable biofuel and biomaterial technologies;
- Guarantee schemes possibly leveraging the European agricultural fund for rural development (EAFRD) and/or national resources under the Common Agricultural Policy (CAP) Strategic Plans;
- A private equity programme to back European fund managers that target European innovative technologies and solutions for the future of food (agri-tech, food-tech), and to attract private investors to the sector;
- A broadened scope of direct lending to medium-sized and large counterparts to include not only cooperatives but also other farmer organisations or entities such as irrigation communities, associations for dam and dike maintenance or forestry maintenance;
- Increased support to infrastructure in rural areas, such as road networks, education, and agricultural water management.
To ensure favourable loan terms, the package allows for the financing to be complemented by interest rate subsidies or capital grants under the EU and national budgets.
EIB Group will work closely with the commission to enact the plan with a view to maximise public investment sources while leveraging and de-risking private capital in the agricultural sector.