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09/11/2018 1European Investment Bank

Financing for resilient and climate-smart SMEs

in the agri-food sector: what EIB can do to

leverage financing and unleash partnerships?

Workshop “Fostering the engagement of the agri-food sector in

resilience to climate change”, Geneva, 29-31 October 2018

Ludwig Liagre

Climate Change Specialist, EIB

Mini-workshop “Finance for SMEs to implement climate resilient

supply” chains

European Investment Bank at a Glance

The EU Bank

Shareholders: 28 EU Member States

Support to EU policies

Largest multilateral lender in the world

Around 400 projects annually in more

than 160 countries

Efforts to mitigate/adapt to climate change are a priority for EU hence the EIB

target of more than 25% of total EIB lending towards Climate Action in the EU

(and 35% outside the EU by 2020)

More than 150 in-house sector specialists, including agriculture/forestry experts

European Investment Bank

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EIB Priorities

EIB’s financing supports EU policy priorities and

objectives (climate change, infrastructure, energy, SMEs,

regional development, etc.).

Climate action is a horizontal objective, i.e. it is integrated

in the other priority objectives.

09/11/2018 European

Investment

Bank Group

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Climate Risk Management (CRM) System

Develop and establish a comprehensive and mainstreamed approach

o Support the systemic screening of climate risk

o Screen 100% of EIB’s projects/activities by 2020

o Ensure that EIB’s projects are resilient to climate change

o CRM system provides a framework for the efficient, effective and consistent

assessment and reporting of climate risk

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09/11/2018 6European Investment Bank

The CRM System in EIB’s project cycle

Climate Risk Triage

Project Initiation/Attribution

Climate Risk Screening

PIN/Pre-appraisal

Consideration of Climate Risk

Appraisal

Post Appraisal

M&E

Post Appraisal

Management Committee/Board Approval

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EIB Financing Instruments

The EIB has, to its disposal, an extensive range of instruments to finance

public and private sectors at investment and sub-investment grades of risk

EIB lending instrument for Investment Grade operations

Special Activities

For low and sub investment Grade operations

Project Finance

Direct Loans

Project

Project finance with

direct project risk

First-Loss allowing EIB

undertaking higher risk

Equity through

Funds

Intermediated Loans

Banks

Public Sector

Financing

European Investment Bank Group 725/11/2015 European Investment Bank Group 7

09/11/2018 8European Investment Bank

Sustainable

Ocean

Fund

Land

Degradation

Neutrality

Fund

Climate Funds

“Impact investment vehicle that will invest into

marine and coastal enterprises that can

deliver marine conservation, improved

livelihoods and attractive economic returns. It

builds on recent analysis (EDF) demonstrating

that profits in the global fishing sector could be

grown by $51 billion USD (115%) a year

compared to today, if fisheries were managed

sustainably”.

“The Fund will invest in sustainable

land use projects, focusing in

particular on sustainable agriculture

and forestry, land reclamation and

sustainable energy. It is mission-

driven to deliver a strong contribution

to the achievement of land

degradation neutrality”. EIB equity

funding

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A EUR 120 million loan, implemented by the Ministry of Forestry and Water Works :

forest rehabilitation, afforestation and erosion control activities, in the period 2016-2017.

Two previous EIB operations of this kind in Turkey: a EUR 150 million facility (signed

2011), EUR 150 million facility (signed 2013).

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Public Sector Financing

Contribution to climate change mitigation

and adaptation, provision of multiple

environmental benefits including

improvements to forest health, protection of

soil and water resources, and increased

supply of timber and biomass for energy.

Support to local rural economies in terms of

employment and sustainable raw material

supply to first-stage wood processing

industries, typically rural SMEs.

Example : Reforestation/Afforestation in Turkey

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Credit Lines

Armenia APEX II Loan for SMEs and

MidCAPS

intermediated through the Central Bank

of the Republic of Armenia

agri-food and tourism significant

beneficiary sectors.

TA programme for climate action

MBIL FOR COMUNIDADES DE

REGANTES

projects to be funded by Financial

Intermediaries, involve the upgrading

of the current infrastructure for higher

efficiency in water and energy use

opportunities for farmers to improve

the resource footprint of their

production

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09/11/2018 11European Investment Bank

The Natural Capital Financing Facility (NCFF) offers funding to projects that promote the

conservation, restoration, management and enhancement of natural capital for

biodiversity and adaptation benefits, including ecosystem-based solutions to

challenges related to land, soil, forestry, agriculture, water and waste inside the EU.

NCFF Cities: blue and green infrasturctures in urban areas.

The NCFF consists of a combination of the following two components:

1.The finance facility can provide financing

of a minimum amount of EUR 3 million and

a maximum amount of EUR 15 million

(75% of the PIC)

2.The technical assistance (TA) facility

(only combined with 1.) can provide each

project with a grant of up to a

maximum of EUR 1 million for project

preparation, implementation and the

monitoring of the outcomes

NCFF – Cities

Natural Capital Financing Facility (NCFF)

Forest Management

Nature and wildlife tourism

Wetland Restoration and Water

Management

Biodiversity and CO2 offsetting

Wildlife breeding and Management

• First project supported by the NCFF, signed in Apr.2017 = EUR 6 million loan to Rewilding Europe Capital.

• Provide loans from 100 to 600 K EUR to small businesses

• Support for +30 nature-focused businesses across Europe.

• Comeback of iconic and threatened European wildlife species such as the European bison, brown bear, black vultures as well as pelicans and white-tailed eagles of the Danube and Oder Delta, to name a few, could also benefit from the investments.

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Going forward, the EIB is looking to further increase its climate action lending

through financial intermediaries by providing support to local banks and other

financial institutions and their SME clients through a comprehensive TA

package targeting climate action in key sectors, including agriculture.

TA support will include a web based eligibility check tool for standard

investments (e.g. equipment replacement in the agricultural sector), web

based training program and best practice investment examples in key sectors

that are replicable and have a good potential for scaling up, capacity building

for local banks, provision of resource efficiency assessments and climate

vulnerability assessments

Target regions are going to the Western Balkans, Southern and Eastern

Neighbourhood countries and the EU Member States. Further expansion of

this support instrument into other regions is envisaged.

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Technical assistance for climate action

Support to multiple stakeholders along the value

chain, including fin. Intermediaries/local

banks+cooperatives+farmers, etc - Technical

assistance

Promote relevant techniques for Climate Smart

Agriculture (CSA), Ecosystem-based Adaptation

(EbA) and Land Degradation Neutrality (LDN), etc

Recognize both “adaptation in projects” and

adaptation “through” projects…

Combine investments with PES approaches,

recognizing multiple environmental services

provided by farmers

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The way forward?

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Ludwig Liagre

Climate Change Specialist

l.liagre@eib.org

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Contacts

Many thanks

for your

attention