European Investment Bank teams up with Rabobank for €1 billion Small and Medium Enterprise funding agreement
The European Investment Bank (EIB) has announced a combined €500 million loan for Rabobank and its subsidiary DLL, marking a significant step towards enhancing access to funding for local sustainability investments from Small and Medium-sized Enterprises (SMEs) and mid-caps in multiple European countries.
This new funding, amounting to a total of €1 billion when matched by Rabobank and DLL, will be directed towards financing climate-relevant and agricultural projects across the European Union. Lara Yocarini, a member of Rabobank's managing board and CEO and chair of the executive board of DLL, expressed her optimism, stating that this funding would enable them to provide more accessible, affordable, and tailored leasing solutions.
The management of the fund falls under the categories of Climate & environment, Infrastructure, and Private equity. This move aligns with the EIB's €1 trillion green investment pledge for the decade up to 2030, which forms part of a broader European Green Deal and climate financing framework. The EIB's focus is on sustainable projects such as renewable energy, energy efficiency, and clean transport, with investments impacting various sectors, including agriculture and SMEs, indirectly.
Climate financing is a key driver of economic growth, as noted by Jean-Christophe Laloux, EIB director general. He expressed hope that this facility could convince other financiers to make available more support for entrepreneurs developing more sustainable projects. The Organisation for Economic Co-operation and Development (OECD) concluded in a 2021 report that SMEs should play a key role in the journey to net zero due to their significant contribution to energy use, emissions, and pollution.
While the EIB's €1 trillion green investment plan targets climate and sustainability goals across the EU, precise allocations dedicated solely to SMEs and mid-caps for climate and agricultural projects have not been quantified in the current data. However, a substantial portion of the funding targets climate objectives broadly, supporting sustainable infrastructure and innovation which may benefit these businesses.
In addition, programs like InvestEU and Horizon Europe, supported by the EU budget, provide guarantees and funding windows for sustainable infrastructure and innovation, some of which aim to support scaling up innovative companies, including SMEs. However, exact earmarking amounts for SMBs and mid-caps specifically in climate-relevant and agricultural projects are not explicitly specified.
The ruling for the EIB's loan to Rabobank and DLL was posted in the category of Climate & environment, Policy & regulation. This decision comes at a crucial time, following the International Court of Justice's ruling that countries must prevent climate damage. The EIB has a history of providing substantial financing to the Netherlands in the past ten years, with over €27 billion allocated across various sectors, including SMEs.
Meanwhile, the Octopus affordable housing fund has received an additional £118m from UK pension funds, with the fund focusing on providing affordable housing and falling under the categories of Pension funds, Housing, and Social impact. CFM and Argos Partners, on the other hand, will manage a shariah-compliant Malaysian infrastructure fund.
In conclusion, the EIB's green investment pledge is a significant stride towards a more sustainable European Union. While the exact allocations for SMBs and mid-caps in climate-relevant and agricultural projects are not yet fully detailed, the EIB's broad support for sustainable infrastructure and innovation offers potential benefits for these businesses.
- The European Investment Bank's (EIB) €1 trillion green investment plan, a significant step towards a more sustainable European Union, aims to impact various sectors, such as agriculture and Small and Medium-sized Enterprises (SMEs), indirectly, through investments in sustainable projects like renewable energy, energy efficiency, and clean transport.
- Lara Yocarini, a member of Rabobank's managing board and CEO and chair of the executive board of DLL, stated that the €1 billion funding for climate-relevant and agricultural projects across the European Union, combined with Rabobank and DLL's own contributions, will enable them to provide more accessible, affordable, and tailored leasing solutions.
- The urgency for climate financing is recognized, as noted by Jean-Christophe Laloux, EIB director general, and the OECD's 2021 report stating that SMEs should play a key role in the journey to net zero, due to their significant contribution to energy use, emissions, and pollution.
- Programs like InvestEU and Horizon Europe, supported by the EU budget, provide guarantees and funding windows for sustainable infrastructure and innovation, some of which aim to support scaling up innovative companies, including SMEs, though exact earmarking amounts for SMBs and mid-caps specifically in climate-relevant and agricultural projects are not explicitly specified.
- Meanwhile, the Octopus affordable housing fund, focused on providing affordable housing, falls under the categories of Pension funds, Housing, and Social impact, having received an additional £118m from UK pension funds.
