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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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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
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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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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
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Contacts
Many thanks
for your
attention