EAFRD and the Junta de Andalucía will co-finance this fund aiming to support and promote the development of the agricultural sector in the region.
The fund will help to preserve and create jobs in two sectors – primary agriculture and agrifood – which together generate more than 34% of employment in a Spanish autonomous community where over 30% of the population live in rural areas.
The financial instrument supports a particularly vulnerable activity where over 80% of companies are small and medium-sized enterprises (SMEs) with fewer than ten workers.
The European Investment Bank (EIB) and the Junta de Andalucía have joined forces once again to support and promote the development of Andalusia's agricultural sector, which in addition to historically facing a funding gap of over €1 billion a year, has also been affected by factors including Brexit and the COVID-19 pandemic. The EU bank will be responsible for managing a guarantee fund of up to €50 million with the goal of providing financing of up to €250 million.
The final beneficiaries will be farmers, agricultural cooperatives and producer organisations as well as companies active in the processing and marketing of agricultural products. The fund’s objectives include support for young farmers, new companies and smallholdings dependent on third-party financing, together with innovative agricultural projects and processing activities. The financing instrument will be co-financed by EAFRD (European Agricultural Fund for Rural Development for the 2014-2020 period) and the Junta de Andalucía.
The agreement signed by EIB Vice-President Ricardo Mourinho Félix and Junta de Andalucía Minister of Finance and European Funds Juan Bravo Baena will enable the EU bank to manage this guarantee fund aimed at fostering investments that support employment, innovation, economic and environmental sustainability, and generational renewal of the sector. Financial intermediaries – which will be selected by means of a public call for expressions of interest to be launched shortly – will be obliged to transfer the financial advantage of the guarantee to the final beneficiaries.
EIB Vice-President Ricardo Mourinho Félix, who is responsible for the Bank's operations in Spain, said: “This agreement reaffirms the close relationship between the EIB and Andalusia, a region that the EU bank has supported for over 30 years, promoting a sustainable economy. The Andalusian agricultural sector is key to both economic growth and job creation in the cohesion region as well as to meeting the rising demand for healthier food while facing challenges such as land degradation, pollution and climate change. We are pleased to support the implementation of this fund that will help Andalusian farmers to better address the difficulties the sector is facing in accessing credit, together with the impact of Brexit and COVID-19.”
Minister of Finance and European Funds Juan Bravo Baena highlighted the leading role of EU funds in the development of the autonomous community by “creating social cohesion and convergence” that have become “factors of global competitiveness for the Andalusian economy.”He also pointed out that “Andalusia is once again a pioneer in the management of these resources, following the indications and recommendations of the European Commission and using new forms of support, in this case via a financing instrument supported by EAFRD.”
The EIB is the European Union's long-term lending institution owned by its Member States. Between 2015 and 2019, the EIB provided almost €33 billion for the agriculture and bio-economy sector.
Andalusia and the EIB Group have worked together closely in a long-term partnership lasting over 30 years. In addition to providing its knowledge and international experience in the management of financial resources by managing two financing instruments intended to promote sustainable urban development in the region (JESSICA Andalucía and SUD Urban Development Fund of FundsAndalucía), the EIB Group has supported the autonomous community by granting €15 billion in loans via over 100 projects, around half of which took place in the last decade.
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