The president of the European Investment Bank Group (EIB), Nadia Calviño, announced a new loan amounting to 3 billion euros for agriculture, forestry and fisheries across Europe, combined with moves to strengthen agricultural insurance.
The loans of the EIB Group will be combined with an equal participation of other financial institutions, thus releasing long-term investments amounting to 8.4 billion. about EUR for the bioeconomy sector. The new financing package marks the EIB’s largest financing initiative for European agriculture and targets small and medium-sized enterprises (SMEs) as well as mid-caps.
The funding will be spread over the next three years and the first loans are expected to be signed in the first half of 2025.
Part of the loans will go to young farmers or young farmers, as they typically find it more difficult to get traditional bank financing. Financial support will also focus on women farmers to address the gender imbalance in agriculture, as well as green investments to support the European Union’s sustainability goals.
EIB President Nadia Calviño said today at the EU Agri-Food Days conference in Brussels: “Agriculture is an important part of European life and a productive part of our economy and security. The EIB Group’s funding announced today will help secure the future for a new generation of farmers, and businesses operating in the agri-food sector and the bioeconomy value chain.”
Agriculture and Food Commissioner Christophe Hansen said: “I welcome the EIB’s strong will to support the EU farming community, especially young farmers and women farmers. Bridging the financing gap in the sector is vital and, with the support of the EIB Group, we are giving agriculture the tools it needs to grow. We will work closely with the EIB to ensure that this funding opportunity is utilized to its full potential, delivering the best results. Together, we are ensuring a sustainable future for the sector.”
The new funding aims to promote investment in a range of activities, including soil health, digital tools, water management and climate resilience. In addition, it aims to strengthen training in sustainable agricultural practices and the purchase of land by young farmers or young farmers, helping to increase the percentage of European farmers under the age of 40 (12%) and the percentage of women (31.6% ).
“We are increasing our support to agriculture and the bioeconomy, using a wide range of innovative tools,” said EIB Vice-President Gelsomina Vigliotti. “Working with partners across the value chain, we aim to help address agriculture’s triple challenge of producing affordable food, protecting agricultural production and farmers’ livelihoods in the face of climate change, and preserving the environment and of natural resources”.
To ensure favorable lending conditions, the package of measures allows the financing to be supplemented by interest rate subsidies or capital grants within the framework of the EU and national budgets. Participating financial institutions will receive additional advisory support through the Green Gateway programs and the enhanced Green Eligibility Checker – an online tool to assess the eligibility and climate impact of green investment projects.
The EIB Group, as part of its increased support for the bioeconomy, is exploring ways to improve agricultural insurance against increasingly frequent extreme weather events such as floods and droughts. It will work with the European Commission, the insurance industry and other stakeholders to consider options for strengthening the EU’s support for existing insurance systems, alongside EU-wide action to accelerate investment in adaptation to climate change or providing greater liquidity and credit risk coverage for companies affected by climate disasters.
The new initiatives are part of the EIB Group’s action plan under the “Strategic Dialogue on the Future of EU Agriculture” launched by European Commission President Ursula von der Leyen in January 2024. The dialogue is a new forum which aims to develop a common understanding and shape a common vision for the future EU agricultural and food system.
The EIB Group will work closely with the European Commission to implement this plan in order to maximize public investment sources, while mobilizing the leverage of private capital while reducing the risks of private capital in the agricultural sector.
The EIB Group action plan also includes the following:
- A venture debt programme, which will provide loans to innovative companies across the agricultural value chain, dealing with, for example, new technologies, the development of payments for ecosystem services or sustainable biofuel technologies and biomaterials.
- Guarantee systems, which may utilize the European Agricultural Fund for Rural Development (EAFRD) and/or national resources in the context of the strategic plans of the Common Agricultural Policy.
- A private equity program to support European fund managers focusing on European innovative technologies and solutions for the future of food (agritech, food technology) and to attract private investors to the sector.
- An expanded range of direct lending to medium and large counterparties to include not only cooperatives but also other farmers’ organizations or entities, such as irrigation communities, associations for the maintenance of dams and dykes or forest conservation.
- Increasing infrastructure support in rural areas, such as road networks, education and agricultural water management.