HeavyFinance is raising €50 million for a private credit fund that will support European agricultural small and medium-sized businesses (SMEs) with tailor-made finance.
The funding will be available to finance solutions “to advance the decarbonization of agriculture in Bulgaria, Latvia, Lithuania, Poland and Portugal.”
EIF Chief Executive Marjut Falkstedt said:
“HeavyFinance is empowering European farmers to cultivate a more sustainable future. With the support of the EIF and InvestEU, we are nurturing the growth of regenerative agriculture, contributing to decarbonization, unlocking the potential of our land and fostering a more resilient planet.”
As a cornerstone investor, the EIF has committed €20 million to the fund.
This sum will not only boost the fund but also “help attract additional investors – both public and private.”
This agreement was made possible “with the support of the InvestEU programme, which aims to trigger more than €372 billion in additional investment between 2021 and 2027 for EU policy priorities, including the green and digital transitions.”
The fund will provide mid-term debt capital “for small and medium-sized agricultural companies to support them in their efforts to reduce their carbon footprint through greener practices.”
These include alternative soil-friendly techniques “that sequester carbon and improve soil health.”
Examples include so-called “no-till farming” (using no or less ploughing), less reliance on synthetic fertilisers and “use of less polluting farming equipment.”
HeavyFinance Chief Executive Officer and founder Laimonas Noreika said:
“Farmers are facing unprecedented challenges due to climate change, but they are also at the forefront of finding innovative nature-based solutions. This fund represents a crucial step in HeavyFinance’s commitment to eliminating one gigaton of carbon dioxide from the atmosphere by 2050.”
Commissioner for the Economy, Paolo Gentiloni, said:
“Small and medium-sized businesses are the backbone of Europe’s economy. They are simultaneously affected by climate change and play a vital role in addressing it. Thanks to the InvestEU programme, we will provide SMEs active in agriculture with the finance they need to work towards decarbonisation. The support will help them for instance to upgrade their equipment and expand working capital. This, in turn, will enable growth and job creation. I am delighted that companies in Bulgaria, Latvia, Lithuania, Poland, and Portugal will be supported by this agreement.
The European Union recognises soil as “a significant carbon sink and the agricultural industry as crucial to achieving the goal of climate neutrality by 2050.”
The fund aims to remove 0.376 tons of carbon dioxide “equivalent per year for every €1 000 invested, aligned with the European Investment Fund’s Climate Action and Environmental Sustainability guidelines.”