HeavyFinance and EIF signed a portfolio guarantee of €10.5m.
HeavyFinance has teamed up with the European Investment Fund (EIF) in order to secure a €10.5 million portfolio guarantee aimed at supporting the ongoing operations of small and medium-sized farms in their shift toward more “sustainable agriculture.”
This partnership will provide farmers and agricultural SMEs with essential financial resources, enabling them to implement greener farming methods and align with or are said to be consistent with the European Union’s “green transition” objectives.
EIF Chief Executive Marjut Falkstedt said that they are looking forward to working with Heavy Finance again, in order to make financing more readily “available for Polish agricultural businesses.”
They added that boosting alternative financing channels is very important in a difficult period for European businesses, and even more so for vulnerable segments of the economy like smaller businesses that are “seeking to transition to a more sustainable footing.”
EIB VP, prof. Teresa Czerwinska said that the agriculture and bioeconomy sector is a strategic sector for the EIB Group.
They also noted that there is a continuous “need for investment to upgrade physical assets, enhance use of digital technology in production processes and improve resource efficiency.”
They also stated that the sector is mostly “made up of farmers, small and medium-sized enterprises, mid-caps and cooperatives that are relatively underserved by the financial sector. Especially, agriculture in Poland is facing a number of transitional challenges such as: succession challenge, technological challenge or climate adaptation challenge. Thus, enhancing the access to finance to this sector is crucial”
Teresa also shared that they are pleased to announce “the signature of the uncapped guarantee under InvestEU in Poland (and Lithuania) with Heavy Finance, which will allow the financial intermediary to offer debt financing on better terms to businesses in agriculture.”
Laimonas Noreika, CEO and founder of HeavyFinance stated that agriculture plays a critical role in climate change mitigation “because of the soil’s ability to act as a carbon sink, storing carbon in organic forms for long periods.”
They added that to speed up the fight against climate change, we need to “increase access to capital to small and medium-sized farm owners who own the majority of agricultural land in Europe.”
And that this first of its kind EIF portfolio guarantee marks “a crucial step in funding the farmers who fight climate change.”
As mentioned in the announcement, HeavyFinance has enabled over EUR60m in agricultural loans to promote sustainable practices, “modernize equipment and increase working capital in agriculture.”
In order to ensure the “positive” impact of external financing provided to farmers, Heavy Finance’s soil scientists and agronomists “collect soil samples and conduct advanced laboratory tests to measure the levels of CO2 removed from the atmosphere.”