EC and EIB sign MoU for co-operation in agriculture and rural development
14 July 2014
Commissioner for Agriculture and Rural Development Dacian Cioloş and Vice President of the European Investment Bank (EIB) Wilhelm Molterer signed today a Memorandum of Understanding (MoU) between the European Commission and the EIB for co-operation in agriculture and rural development in 2014-2020. The first of its kind in the field of agriculture, this MoU paves the way for common initiatives by both institutions, so as to stimulate rural development and boost the utilisation of financial instruments supported by rural development funds.
Commissioner Cioloş said:"This Memorandum of Understanding will bring the agri-food sector closer to financial instruments needed to increase competitiveness and innovation. The financial instruments envisaged have a strong potential for supporting short supply chains, as well asfor small farm structures and young farmers. Farmers will have easier access to funding to back their investment decisions, while Member States and stakeholders will also greatly benefit from the EIB's support and experience on financial instruments and strategic investment."
Vice President Molterer said:“The EIB has long-standing experience in agriculture, rural development and food security financing. Long-term lending conditions can encourage entrepreneurs in these sectors to implement business ideas that are difficult to finance out of the current short term cash-flow. And experience has shown that MoUs are very helpful reference guides for strengthening cooperation and developing future activities.”
The EIB will bring its experience in the development of financial instruments, whichplay an increasingly important role to support competitiveness and innovation in agriculture, forestry, and rural businesses. Under the MoU, the EIB will be able to advise Member States and regions in defining investment strategies and projects. The EIB will also put emphasis on agriculture and rural businesses in its operational programme and its interventions. In more concrete terms, the sort of instruments and interventions that might be covered are investments, pilot and demonstration projects,and innovative projects transferring research results and knowledge-sharing (in line with the European Innovation Partnership for "Agricultural Productivity and Sustainability"). A further example for potential joint cooperation would be the development of financial instruments supporting green infrastructure in rural areas and forestry, as well as the possibility of using EU-level financial instruments such as COSME and Horizon 2020.
The Memorandum of Understanding stresses the EIB's potential role in financing public and private projects, as well as financing national and regional public contributions to Rural Development Programmes. Thus, the EIB Group (i.e. the EIB and European Investment Fund) will also increase its presence in agriculture, agri-food and forestry, by facilitating feasibility assessments, market-gap analyses, and ex-ante assessments in the context of Rural Development Programming.
The EIB is lending EUR 250 million to Slovakia to co-finance priority projects identified under the Slovak Rural Development Programme 2014-2020 that receive support from the European Agricultural Fund for Rural Development. The EIB funds will cover the national co-financing contribution to implementing projects in rural areas across the whole territory of Slovakia.
The EIB is lending EUR 450 million to Romania to finance its national contribution to the implementation of the Romanian Rural Development Programme (RDP) together with grants from the European Agricultural Fund for Rural Development in the period 2014-2020. The loan was signed on the margins of the meeting of the EIB’s Board of Directors taking place in Bucharest on 17-18 September.
Based on the feedback of 7,600 farmers and 2,200 agri-food companies across the EU, 24 country-specific fi-compass reports present the main challenges faced by these two groups when it comes to access to finance. The reports also estimate the financing gap for agriculture in the EU between €19.8 and €46.6 billion, while for the agri-food sector the estimated gap is more than €12.8 billion. These financial needs are likely to be exacerbated by the current crisis.