EFSI in the agriculture sector

The EU's objectives in the agriculture sector are viable food production, sustainable management of natural resources and a balanced development of rural areas. The EU aims to ensure economic viability and competitiveness of the agricultural sector by boosting jobs and growth in rural areas.

Sustained investment in the modernisation and innovation of the sector and its capacity to deliver environmental public goods and services is needed. For instance, Europe lags behind competitors in digitalising agricultural production systems. With new digital systems and sustainable resource management in place, we would see positive environmental outcomes when it comes to soil, water, and habitats.

The European Fund for Strategic Investments (EFSI) is the central pillar of the Juncker Plan. It provides a first loss guarantee, allowing the EIB to invest in more, often riskier, projects. The EFSI can also help to unleash the innovation potential in rural areas. It can contribute to funding new rural business opportunities related to agriculture and forestry products and by-products in the circular economy and bio-economy sectors. According to Commission estimates, the current funding gap in these areas could be up to €9 billion.

Investment platforms

Investment platforms, vehicles which pool smaller projects by location or sector, can be utilised to make it easier for individual agriculture projects to unlock financing. Agriculture projects may not necessarily need large loans. Instead, a number of these smaller projects can be bundled within a larger platform that can be backed by the EFSI. For example, the EFSI could lend its backing to an investment platform designed to support precision farming which would, in turn, allow individual farmers to take out loans to invest in the IT systems needed.

EFSI in combination with other EU funds

The EFSI works in combination with several other EU financing tools available to project promoters in the agriculture sector. For example, projects suitable for financing in the agricultural sector under the EFSI could also benefit from the support of the European Agricultural Fund for Rural Development (EAFRD). This funding source may finance part of the project (in the form of a grant or a loan) while an EFSI-backed loan may cover the remaining costs of the project. The blending of the EFSI with other EU financing tools is applicable to classic investment projects such as the acquisition of physical assets, but also to more complex projects such as the realisation of new business concepts or innovative joint ventures.

Technical support and visibility for projects

The Investment Plan, or so-called Juncker Plan, encompasses far more than the provision of a guarantee to unlock additional investments through the EFSI. The agriculture sector can also benefit from the other elements of the Plan.

As for all sectors, project promoters in the agriculture sector can seek technical assistance through the European Investment Advisory Hub (EIAH). The Hub offers a single access point for advisory and technical assistance services to allow promoters get their projects off the ground.

The European Investment Project Portal – the #InvestEU Portal – is a platform to boost the visibility of investment opportunities, including those in the agriculture sector, across Europe. The aim of the Portal is to bring together project promoters seeking investment with investors seeking projects.

Examples of EFSI projects in the agriculture sector

Normandy dairy production facility, France

The EIB is providing a €55 million loan to Les maitres laitiers du Cotentin to build a new production unit in a dairy production plant. Cotentin is one of the most modern factories in Europe. This new production unit financed by the Investment Plan will allow the agricultural cooperative to produce infant milk and UHT milk as well as to upgrade the production of other goods such as cream and butter.

Creta Farms, Greece

The EIB is providing agri-food company Creta Farms a €15 million loan to develop new product lines and expand its business abroad. The biggest cold-cuts company in Greece, Creta Farms spends five times as much as its peers on innovative ways to produce healthier meats. It removes saturated animal fats from its meats and injects extra virgin olive oil into them. The company took on 100 extra staff thanks to the new finance.

Äänekoski bio-product mill, Finland

The EIB is providing Metsäliitto Cooperative with a €75 million loan to build a new large-scale bio-product mill in Äänekoski in Finland. This project is one of the largest industrial investments ever undertaken in the country. It is expected to create some 6 000 jobs during the construction phase and sustain another estimated 2 500 jobs in the forestry sector.