“Agribusiness Financing: Innovative Financial Solutions” Adam Bruun, Head of EIB Pacific Regional Office

The European Investment Bank (EIB): Lending to Financial Institutions for SME Financing 2nd Pacific Agribusiness Forum Agribusiness Financing: Innovative Financial Solutions Apia, 1 September 2016 Adam Bruun, Head of EIB Pacific Regional Office European Investment Bank

How does the EIB support Private Sector Funding? SMEs + microfinance Mid-cap enterprises Large corporates SPVs & project finance Direct loans 1 Loans intermediated by a bank 2 Loans guaranteed by a bank 3 Microfinance, SME and Mid-cap credit lines to local banks Guarantee provided by the EIB to a local bank (only in specific cases) Equity investments mostly through Private Equity funds European Investment Bank

Risk-bearing: Impact Financing Envelope (IFE) Areas of Focus Social and demographic challenges: Unemployment, in particular in rural areas and among women and youth, food security, social and financial exclusion, migration, post-conflict / post-disaster recovery, access to healthcare, access to education and training etc. Environmental challenges: climate action (including access to renewable energy and energy efficiency), forestry issues, waste management, preservation of biodiversity, water supply etc. Four financing channels Potentially higher risk Transactions Significant and measurable impact Social Impact Equity Funds Loans to Financial Intermediaries Risk-sharing Instruments Direct Financing Unemployment, in particular in rural areas and among women and youth, food security, social and financial exclusion, migration, post-conflict / post-disaster recovery, access to healthcare, access to education and training climate action (including access to renewable energy and energy efficiency), forestry issues, waste management, preservation of biodiversity, water supply potentially higher risk transactions, including in some countries beyond our standard risk appetite but with significant and measurable impact key question on how to monitor European Investment Bank

IFE Instruments Social Impact Funds Risk-sharing Instruments venture capital / private equity / social impact funds managers explicitly pursue social impact goals focus on employment, working conditions, vulnerable populations, access to healthcare, energy, education, etc. first loss guarantees to facilitate risk-sharing operations with local financial intermediaries supporting SMEs and small projects help leverage senior guarantee tranches from EIB and other IFIs / DFIs Loans to Financial Intermediaries Direct Financing local currency loans in economically deprived countries beneficiaries: smallholder farmers, micro-enterprises and SMEs intermediaries: commercial banks, credit cooperatives, microfinance institutions etc. strengthened with technical assistance and advisory services debt (and possibly equity) instruments with high developmental impact promoted by sound, experienced investors focus on underserved sectors such as agriculture, private health and education European Investment Bank

European Investment Bank The Caribbean and Pacific Impact Finance Facility (CPIFF) LENDING FACILITY 40 m EUR Senior debt 3- 7 years with 1-2 year grace period Unsecured Local currency, EUR and USD Fixed interest rate Financial intermediaries Microfinance institutions Downscaling banks Wholesale funder of MFIs Tailored capacity building TECHNICAL ASSISTANCE FACILITY Eligible clients with loans < EUR 50,000: Micro and small enterprises Low income households with small scale impact projects Financial education Mentoring European Investment Bank

European Investment Bank CPIFF Requirements As a rule: loans to eligible final beneficiaries shall not exceed EUR 50,000 EIB loan will not exceed 50% of MFI’s equity EIB loan will finance up to 50% of the eligible loan portfolio Qualitative requirements: Endorsement of client protection principles and commitment to gradually comply Satisfactory AML/CFT policy in place Exclusion list of sectors to be applied Regular reporting on portfolio results indicators European Investment Bank

Thank you! EIB in the Pacific European Investment Bank Pacific Regional Office Level 25, 88 Phillip Street SYDNEY NSW 2000 Australia Adam Bruun Head of Regional Office tel +(61 2) 8211 0536 email: a.bruun@eib.org Katrin Bock Business Analyst tel +(61 2) 8211 0532 email: k.bock@eib.org European Investment Bank

Example: ACP Smallholder Farming A joint initiative of EIB and IFAD to support smallholder farming activities in ACP countries Building on pilot projects carried out by IFAD, with the objective of providing medium to long-term local and foreign currency funding (currently very scarce) 5-8 countries targeted, including Malawi, Mozambique, Ethiopia, Nigeria, Rwanda Amount: up to EUR 50m Support to up to 100,000 smallholder farmers over 2014-20. European Investment Bank

European Investment Bank Cotonou Agreement: Resources and Amounts European Investment Bank