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

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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)
Katrin Bock
Business Analyst
tel +(61 2)
European Investment Bank

9. 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
European Investment Bank

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