SANTANDER PT LOAN FOR AGRICULTURE

Promoter – Financial Intermediary

BANCO SANTANDER TOTTA SA

Location

• Portugal

Description

The loan will support eligible projects carried out by small and medium-sized enterprises (SMEs) and mid-caps in Portugal.

Additionality and Impact

The proposed transaction consists of an intermediated loan with Banco Santander Totta ("BST"), a financially solid promoter and repeat counterparty of the EIB. The operation will enable BST to finance small and medium-sized investment projects in the agriculture sector carried out by SMEs and Midcaps enterprises operating in Portugal.

The operation thus falls under the EIB's vertical Public Policy Goal (PPG) of "SME and Midcap financing" and horizontal PPG "Economic and Social Cohesion". Banco Santander Totta commits to dedicate at least 10% of the loan amount to young and newly installed farmers. 

The operation will address market weaknesses and failures related to the availability of financing for SMEs operating in the agriculture/bioeconomy sectors in Portugal. For such SMEs, this project will ease the financial constraints that arise from information asymmetries caused by the lack of track record, insufficient farm net asset value to collateralize, as well as high screening costs for small investments. In addition, these projects address financial market inefficiencies caused by the fact that the economic life of an investment project exceeds the tenor of loans that are typically available on domestic capital markets.

Objectives

The aim is to support investment projects carried out by the final beneficiaries in the agricultural sector. Part of the loan will also be dedicated to young and newly installed farmers. Sub-projects are expected to cover a broad range of activities, such as, but not limited to: sustainable and regenerative agriculture; working capital for climate resilience and adaptation crops varieties; infrastructure improvements and water management system.

Sector(s)

• Credit lines - Credit lines

Proposed EIB finance (Approximate amount)

EUR 75 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 - 7/03/2025