HeavyFinance signs €10.5m portfolio guarantee with EIF
HeavyFinance and the European Investment Fund (EIF) have signed a portfolio guarantee of up to €10.5m (£8.7m) to support agricultural businesses in Poland and Lithuania on their sustainability transformation.
The guarantee will help to deliver €15m of new debt financing to 550 farmers in Poland and Lithuania.
The transaction is supported by the InvestEU programme, which aims to mobilise more than €372bn in additional investment for European Union policy priorities over the period 2021-27.
Alternative lender HeavyFinance is present in six countries and has already enabled more than €60m in agricultural loans to promote sustainable practices, modernise equipment, and increase working capital in agriculture.
Read more: HeavyFinance allocates €1.33m in July
“We are very glad to be teaming up with HeavyFinance again, in order to make financing more readily available for Polish agricultural businesses,” said EIF chief executive Marjut Falkstedt. “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 vice president professor Teresa Czerwinska added: “The agriculture and bioeconomy sector is a strategic sector for the EIB Group. There is a continuous need for investment to upgrade physical assets, enhance use of digital technology in production processes and improve resource efficiency. 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.”
Read more: HeavyFinance secures investment from Lithuanian institution
HeavyFinance founder and chief executive Laimonas Noreika continued: “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. 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.”
The InvestEU Fund is deployed through implementing partners that will invest in projects using the €26.2bn EU budget guarantee.
The entire budget guarantee is intended to back the investment projects of the implementing partners, increase their risk-bearing capacity and mobilise at least €372bn in additional investment.
Read more: European Investment Fund: Backing sustainable development
