The European Investment Bank (EIB) has approved €700 million of financing for the agriculture and bioeconomy sector. The initiative aims to unlock around €1.6 billion of investment in these sectors by supporting private companies operating throughout the value chains of production and processing of food, bio-based materials and bioenergy.
The funding will be guaranteed by the European Union (EU) budget under the European Fund for Strategic Investments (EFSI), which forms the financial pillar of the 'Investment Plan for Europe'. The programme will enable direct lending for private sector investments ranging from €15 million to €200 million, with the EIB loan amount ranging from €7.5 million to €50 million.
According to the EIB, targeted investments will support environmental protection and natural resource efficiency, renewable energy, innovation, competitiveness and energy efficiency. The new initiative is a continuation of the first €400 million agriculture and bioeconomy programme loan launched in 2008 and is nearly fully committed.
The first initiative generated "significant interest" in the sector, with multiple projects originated with corporate and cooperative counterparties in several EU countries, including France, Poland, Italy, Ireland and Latvia.
"Since the coronavirus pandemic reached Europe, the EIB has been fully mobilised with the European Commission to deploy a support plan for the hardest hit SMEs, including those in the agri-food sector," said EIB vice-president responsible for the bioeconomy, Andrew McDowell.
"Nevertheless, the EIB's long-term financing of the sector continues in parallel, with a focus on innovation, climate action, environmental sustainability and rural development. The first €400 million of the agriculture programme loan has already supported 10 transformational investments for European agriculture and also strengthened rural communities. With this second financing, we are providing an additional €700 million to build on this success and meet market demand."
Janusz Wojciechowski, European Commissioner for Agriculture, added: "The coronavirus pandemic affects every single one of us and every single sector. In this dramatic context, I warmly welcome this second step in EIB's strategy under the Investment Plan to finance measures deploying a support plan for the agri-food sector.
"I am strongly convinced that this will be a very important and useful instrument in helping the sector remain robust and resilient to overcome the crisis."