BRUSSELS, BELGIUM — A new financing initiative launched by the European Investment Bank (EIB) is expected to unlock close to €1 billion in investment in the agriculture and bio-economy sector.
The financing targets investments by private cooperatives and companies in the agriculture sector. EIB will finance €400 million under the Juncker Plan’s European Fund for Strategic Investments.
The European Investment Bank (EIB), the E.U. bank, announced the launch of a new financing initiative that aims to unlock close to €1 billion of investment in the agriculture and bio-economy sector.
The bio-economy sector includes the value chains of production and the processing of food, material and energy using renewable biological resources from land and sea.
“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,” said Phil Hogan, European commissioner for agriculture and rural development. “This is where the Juncker Plan can play an important role. I am delighted to welcome this initiative which will, with the support of the Juncker Plan, provide a €1 billion boost to jobs and growth in Europe’s rural economy.”
The program has the potential to create jobs in predominantly rural areas and smaller towns across the continent, said Werner Hoyer, president of the EIB.
“In this way it will contribute to mitigating rural-urban migration and, together with other measures and projects, will address the issue of rural depopulation through the promotion of rural and regional economic development,” he said.
Despite its size and importance in the overall European economy, the sectors are mainly made up of companies and cooperatives with relatively small investments, which are difficult to target with direct lending.
The EIB is already active with Multi Beneficiary Intermediated Loans to support the implementation of smaller projects by farmers and small and medium-sized enterprises active in bio-economy value chains through commercial banks across Europe. The lending program constitutes an initial, replicable EIB pilot that will enable direct lending for private sector investments (from €15 million to €200 million) with a loan amount ranging from €7.5 million to €50 million.
Projects allocated under the program loan will be implemented in the period 2018-22. Targeted investments will seek to promote the efficient and sustainable use of resources and the re-use of by-products, and to develop intellectual property through the support of private sector research, development and innovation.