Seeing the wood for the trees in Slovakia

Seeing the wood for the trees in Slovakia

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Forests and other wooded land account for over 40% of the EU’s land area. In recent decades, afforestation and natural succession have increased this area by approximately 0.4% annually while the global demand for forest products continues to grow steadily at an annual rate of 3%. It is no surprise that investment in sustainable forestry is a growth area for the EIB.

When we think of forests, many of us conjure up idyllic images of lush expanses of green bursting with woodland life. Well-managed forests hold the key to protecting ecosystems and providing global ecological benefits. However, woodland areas are also an important source of employment for 3 million people living in Europe’s rural areas.

The EIB has been active in the forest sector for some 35 years, promoting its wide range of economic, environmental and social benefits by investing in the entire forest value chain, from planting, management and fire protection, to processing and timberland funds.

Our commitment to Europe’s living and breathing green resource is reflected in our support for the forest-focused measures of national and regional rural development programmes. Given that the European Agricultural Fund for Rural Development, under which these programmes are designed, accounts for some 90% of EU funding for Europe’s forests, the possibility of blending our loans with European Commission funding represents a significant opportunity for the EU bank.

Planting the seeds of opportunity in Slovakia

March 2014 saw a first for both the EIB and Slovakia: we signed our first ever forestry loan in support of the Slovak Ministry of Agriculture and Rural Development’s inaugural comprehensive rural development programme. EUR 120m of EIB finance will contribute to afforestation projects, improved forest protection and management and the upgrading of agricultural infrastructure.

Forests play a particularly important role in maintaining Slovakia’s delicate environmental balance; they make up 69% of the country’s Natura 2000 network of protected areas, against an EU average of 51%. This significance is not lost on the EIB, and our Vice-President László Baranyay underlined his pleasure at EIB funds nurturing green growth in the country: “The project will have considerable environmental benefits in terms of improved forest ecosystem health and increased greenhouse gas sequestration and renewable energy production. It will also generate new employment throughout the country.”

From small farms to growing agro-tourism

The project’s final beneficiaries represent a wide range of public and private entities, including over 2 000 farmers whose land will benefit from the modernisation of on-farm facilities to improve the environmental performance of farms. On-farm use of renewable energy and energy efficient technologies will be promoted, and better nutrient management will reduce surface and groundwater pollution from livestock farming activities to improve the management of all-important water resources.

An important facet of the loan will be to contribute to the rehabilitation and improved management and protection of more than 300 000 ha of forest damaged by storms, pest outbreaks and fires in recent years. 40 km of forest access roads will be built or repaired to facilitate forest conservation and management operations. The Slovak authorities are particularly proud of the fact that, during implementation, the project will create new jobs in the rural economy, supporting growth and employment. Moreover, the nationwide forestry programme represents an important step in the development of a new age of agro-tourism in the central European country.