EBRD and EIB provide Romanian farmers with €12.5 million in new funds
The EIB, with the support of the EIF and the EBRD, is providing new financing of EUR 7.5 million and EUR 5 million respectively for Agricover Credit IFN;
Romania's main agricultural financiers expand farmers' access to finance;
The loans will help local producers overcome the impact of the coronavirus pandemic.
Farmers in Romania will benefit from improved access to finance through new funds offered to Agricover Credit IFN by the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB).
Agricover Credit IFN finances the agricultural and livestock sector and works with more than 15% of all performing farmers in Romania. It is a subsidiary of Agricover Holding S.A., which provides Agri-Finance services through a highly integrated and original business model, focused on meeting the essential needs of farmers.
The EBRD, a shareholder of Agricover Holding S.A., is providing an additional €5 million in funding, increasing the financing to the company to €20 million. The EIB is providing a first tranche of €7.5 million out of a total approved loan amount of €15 million. These funds are made available to Agricover Credit IFN in addition to the EUR 20 million loan previously granted. The EIB financing is guaranteed by the European Fund for Strategic Investments (EFSI).
The new funds will enable Agricover Credit IFN to extend its financing to agriculture and help farmers affected by the economic impact of the COVID-19 pandemic,
Mark Davis, EBRD Regional Director for Romania and Bulgaria, said, "Agricultural producers in Romania have been affected by disruptions to demand, supply chains and exports, while facing increased uncertainty in the 2020 harvest season. The provision of additional agricultural finance will help farmers overcome these challenges to the benefit of rural communities and the wider industry during Covid-19 and beyond."
EIB Vice President Andrew McDowell commented, "Our second collaboration with Agricover, with EIF support, will ensure the continuity of affordable medium-term loans to SMEs operating in the agricultural sector, including young farmers. The successful implementation of the first operation with Agricover has provided much needed investment to improve productivity and economic development in rural areas for increased competitiveness and job creation as well as cohesion. This additional funding will provide the necessary support to Romania's rural regions to better cope with the consequences of the current Covid-19 crisis".
EU Economy Commissioner Paolo Gentiloni said: "To overcome the economic consequences of the coronavirus pandemic we must continue to promote European solidarity. Together with the European Bank for Reconstruction and Development and the European Investment Bank, the Commission is proud to support this financing agreement with Agricover Credit to protect farmers in Romania."
"With this additional funding from the EBRD and the EIB, Agricover Credit will continue to provide seamless, specialised financial support, fostering a secure and efficient environment for all our farmer partners. We are honoured and delighted to see that leading international financial institutions have confidence in our business model and our proven ability to operate despite the challenges in the market," said Robert Rekkers. Managing Director, Agricover Credit IFN.
Background information:
EBRD
The European Bank for Reconstruction and Development is a multilateral bank promoting private sector development and entrepreneurship in 38 economies on three continents. The Bank is owned by 69 countries as well as the EU and the EIB. EBRD investments aim to make the economies of its regions competitive, well-governed, green, inclusive, resilient and integrated.
In Romania, the EBRD focuses on financing infrastructure, especially in the regions; boosting private sector productivity; and further developing the financial sector and capital markets.
The European Investment Bank (EIB) is the bank of the European Union. It is the EU's long-term lending institution and is the only bank owned by and representing the interests of EU Member States. It provides long-term finance available for sound investment to contribute to EU policy objectives. The EIB works closely with other EU institutions to implement EU policy.
As the largest multilateral lender and borrower by volume, the EIB provides finance and expertise for sound and sustainable investment projects that help promote EU policy objectives. Over 90 percent of EIB activity is focused on Europe, but it also supports EU external and development policies.
The European Fund for Strategic Investments (EFSI) is the main pillar of the Investment Plan for Europe. It provides partial guarantees that allow the EIB to invest in a larger number of often riskier projects. Projects and agreements approved for financing under the EIF are expected to mobilise EUR 486 billion for investment, including EUR 3.6 billion in Romania, and support over 1.2 million start-ups and SMEs across the EU.
More information on the Investment Plan for Europe is available here.