BPS AGRI LOAN FOR SMES AND MIDCAPS

Promoter – Financial Intermediary

ACCEPTABLE BANK(S),BANCA POPOLARE DI SONDRIO SPA

Location

• Italy

Description

The operation consists in a lending facility in the form of a covered bond to Banca Popolare di Sondrio (BPS) along other eligible financial institutions in Italy under a system of double intermediation in order to have regional capillarity and achieve a minimum of 30% of cohesion target (on best effort basis).

Additionality and Impact

The loan is expected to support EU policy objectives, such as modernisation in the agriculture sector climate action and biodiversity, and rural development. It also supports the New Common Agricultural Policy 2023-2027. Minimum 30% will be used to finance eligible Climate Action and Environment Sustainability (CA&ES) projects implemented by Italian SMEs (and also mid-caps) operating in the agriculture & bioeconomy sectors. The implementation of the project will also be carried by other eligible financial institutions in the Country under a system of double intermediation in order to have regional capillarity of financing aiming at a minimum of 30% of cohesion target.

The project will ease constraints on access to finance faced by Italian SMEs operating in the agricultural and bioeconomy sectors. The beneficiaries face deep market failures related to lack of track-record, insufficient farm net asset value to collateralize and high screening costs for small investments. With this in mind, the project will enable SMEs to benefit from financing with tenors that match the economic life of the investment undertaken, as well as from transfer of financial advantage and complementarity that prompts the intermediary to match the EIB contribution. Furthermore, it will mobilize private sector investment, contributing to the sustainability of both sectors. Overall, the project can generate positive externalities in terms of competitiveness in a key sector for Italy and the EU and in terms of climate change mitigation and environment. It will also help strengthen EU socio-economic cohesion. This operation supports the agriculture/bioeconomy sector in general.

Objectives

The aim is to support investments and working capital needs of small and medium-sized enterprises (SMEs) and mid-caps operating in the agricultural and bioeconomy sectors. At least 30% will be used to finance eligible Climate Action and Environment Sustainability sub-projects.

Sector(s)

• Credit lines - Credit lines

Proposed EIB finance (Approximate amount)

EUR 200 million

Total cost (Approximate amount)

not applicable

Environmental aspects

The operation falls within the scope of the EIB's Environmental and Social Standards - "Standard 11 Intermediated Finance". The Borrower / Financial Intermediary has adequate capacity, systems and processes in place for identifying, assessing, managing and monitoring environmental, climate and social (ECS) risks related to the potential sub-projects benefitting from EIB support. The Final beneficiaries will be required to comply with applicable national and EU legislation in respect of environmental and social matters, as appropriate.

Procurement

Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.

Status

Signed - 26/03/2025