EIF implements new Normandie Garantie Agri loan guarantee instrument on behalf of Normandy region to help farmers to access finance

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• Normandy Region President Hervé Morin, Regional Vice-President for Farming, Fisheries and Forestry Clotilde Eudier, and European Investment Bank (EIB) Group (of which the European Investment Fund (EIF) is part) Vice-President Ambroise Fayolle have presented the Normandie Garantie Agri instrument to the Triangle à Saint Pierre en Auge farming partnership (groupement agricole d’exploitation en commun – GAEC).
• Implemented through three partner banks (Crédit Agricole, Crédit Mutuel-CIC and BRED-Banque Populaire), this loan guarantee fund targets companies in the farming, forestry and equine sectors. The instrument can be used together with grants and makes it easier to access bank loans.
• The EIF’s support and expertise – provided on behalf of the Normandy region – opens up a new agricultural loan guarantee instrument to improve the development, modernisation and promotion of companies in the regional farming, equine and agri-food sectors.

The 2020 ex ante appraisal of EU funds indicated that Normandy suffers from market failures in access to finance for companies in the farming, agri-food, forestry and equine sectors.

The loan guarantee project was welcomed in the 2021-2022 professional consultation, with participating banks expressing a number of expectations for this type of instrument.

“I would like to thank the banks for agreeing to join this fund. We have a dynamic agricultural sector here in Normandy – both in terms of facilities and investments. This fund will make it possible to provide €260 million in loans to back 1 000 to 2 000 projects by 2028,” said Normandy Region President Hervé Morin.

“The agricultural sector is a financing priority for the EIB Group. Tailored to the needs of farmers, this guarantee shows that the regional authorities, the European Union and our banking partners can join forces to provide tangible and effective solutions to strengthen this key sector in Normandy,” added EIB Group Vice-President Ambroise Fayolle.

The goals of the regional authorities are to:

• make it easier to access finance, enabling projects to be implemented, farms to be set up or taken over, and new activities to be developed;
• promote better access to finance for risky projects, beneficiaries with credit access difficulties and new companies;
• make financial intermediary (bank) conditions and guarantee requirements less stringent;
• limit guarantee costs for project promoters.

The Normandy region approached the EIF and mobilised European Agricultural Fund for Rural Development (EAFRD) resources for 2023-2027 to set up a €35 million loan guarantee fund (with €21 million from EAFRD resources and €14 million from the regional authorities). The loans provided by the selected banks (Crédit Agricole, Crédit Mutuel-CIC and BRED-Banque Populaire) will create a leverage effect on the initial resources. In return, the banks have undertaken to improve bank credit access conditions for final beneficiaries (reduced interest rates or personal guarantees, providing riskier financing, etc.).

The goal is to back 1 000 to 2 000 projects, lending a total of around €260 million.

This guarantee fund must enable the financing of tangible and intangible (advisory, training, project management, etc.) investments, as well as working capital requirements. Property purchases are not eligible, except for young and new farmers receiving setup aid (with a maximum property purchase value of €150 000).

Press contacts:

EIF: Christophe Alix, c.alix@eib.org, tel.: +33 6 11 81 30 99

Website: www.eif.org – Press Office: +352 4379 21000 – press@eib.org

X: @eif_eu 

Normandie region: Laure Wattinne, laure.wattinne@normandie.fr, tel.: +33 6 44 17 55 41