€3 billion of EIB Group financing announced for farmers and bioeconomy

This article is published in association with European Investment Bank.

• EIB Group offers €3 billion in loans for agriculture and other bioeconomy activities across Europe with focus on young farmers, gender equality and green investments
• EIB Group also working with European Commission to develop new forms of agricultural insurance and de-risking schemes against extreme weather events
• New initiatives form part of EIB Group’s plan for agriculture and bioeconomy in the context of Strategic Dialogue on the future of EU agriculture

European Investment Bank (EIB) Group President Nadia Calviño has announced a €3 billion financing package for agriculture, forestry and fisheries across Europe along with moves to bolster farm insurance. The 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. It 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. The support will also target female farmers to overcome a gender imbalance in agriculture as well as green investments to support the European Union’s sustainability goals.

“Farming is a vibrant part of European life, and a productive part of our economy and security. The EIB Group financing announced today will help ensure a future for a new generation of farmers and companies active in the agri-food industry and the bioeconomy value chain” EIB Group President Nadia Calviño said today at the EU Agri-Food Days conference in Brussels.

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 are securing a sustainable future for the sector.”

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 boost the 12% share of Europe’s farmers who are under the age of 40 and the 31.6% share who are women.

“We are stepping up our support for agriculture and the bioeconomy using a wide array of innovative tools,” said EIB Vice-President Gelsomina Vigliotti. “Working with partners along the whole value chain, we aim to help meet agriculture’s triple challenge of producing affordable food, protecting farm production and livelihoods in the face of climate change and preserving the environment and natural resources.”

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. Participating financial institutions will also gain extra advisory support from the Green Gateway programme and an enhanced Green Eligibility Checker – an online method to assess the eligibility and climate impact of green investment projects.

As part of its increased support for the bioeconomy, the EIB Group is exploring ways to improve agricultural insurance against the more frequent incidents of extreme weather including floods and droughts. It will work with the European Commission, the insurance industry and other stakeholders to examine options for enhancing EU level support of current insurance schemes coupled with pan-European measures to accelerate investment in climate adaptation or to provide more liquidity and credit risk coverage for companies affected by climate disasters.

The new initiatives are part of an action plan by the EIB Group within the context of a “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 that aims to develop a joint understanding and shape a shared vision for the future EU farming and food system.

The EIB Group will work closely with the European Commission to enact the plan with a view to maximise public investment sources while leveraging and de-risking private capital in the agricultural sector.

The 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 Strategic Plans
• A private equity programmeto back European fund managers that target European innovative technologies and solutions for the future of food (agritech, foodtech), 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.

Keynote speech of EIB Group President Nadia Calviño at the EU Agri-Food Days

Background information

The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. It finances investments that contribute to EU policy objectives. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion, and support a just and swift transition to climate neutrality.

The EIB Group, which also includes the European Investment Fund (EIF), signed a total of €88 billion in new financing for over 900 projects in 2023. These commitments are expected to mobilise around €320 billion in investment, supporting 400 000 companies and 5.4 million jobs.

All projects financed by the EIB Group are in line with the Paris Climate Accord. The EIB Group does not fund investments in fossil fuels. We are on track to deliver on our commitment to support  €1 trillion in climate and environmental sustainability investment in the decade to 2030 as pledged in our Climate Bank Roadmap. Over half of the EIB Group’s annual financing supports projects directly contributing to climate change mitigation, adaptation, and a healthier environment.

Approximately half of the EIB’s financing within the European Union is directed towards cohesion regions, where per capita income is lower. This underscores the Bank’s commitment to fostering inclusive growth and the convergence of living standards.

The Green Gateway advisory programme: financed under the InvestEU Advisory Hub and managed by EIB Advisory, the Green Gateway programme provides advisory services aim to strengthen the skills, procedures and operational tools of EIB Group financial intermediaries to promote the planning, selection and financing of projects and enterprises with positive environmental impact. It also offers an online portal that includes guidelines, case studies and other useful information on green investment. The portal provides access to the Green Eligibility Checker – an online tool making it possible to assess the eligibility and climate impact of green investment projects using EIB financing.

Launched in 1962, the EU’s common agricultural policy (CAP) is a partnership between agriculture and society, and between Europe and its farmers. It aims to support farmers and enhance agricultural productivity to ensure a stable supply of affordable food while safeguarding their livelihoods. The CAP also focuses on tackling climate change, promoting the sustainable management of natural resources, and preserving rural areas and landscapes across the EU. Additionally, it seeks to sustain the rural economy by fostering jobs in farming, agri-food industries, and related sectors. Through the CAP funds, the European Commission ensures that funding for the common agricultural policy is fair, ample, and transparent.