Farm Ireland
Independent.ie

Sunday 24 June 2018

Rabobank to provide cut-price loans to farming and food sectors

Rabobank Headquarters
Rabobank Headquarters
Rabobank’s head office in the Dutch city of Utrecht
EIB vice-president Andrew McDowell was an advisor to former Taoiseach Enda Kenny
Colm Kelpie

Colm Kelpie

The European Investment Bank (EIB) is partnering with Dutch lender Rabobank to provide €200m in cheap loans to Irish SMEs in the farming and food sectors.

The funds will be provided at a discount through Rabobank's vendor-financing operation DLL, with €100m being stumped up by each.

The move comes less than six months after the two bodies established a €50m pool to deploy towards projects that could demonstrate a positive climate impact in Ireland.

"That went so well for them [DLL] that they've come back to us to look for an expanded package," said EIB vice-president Andrew McDowell.

"We do lending through intermediary banks all through Europe. This is something we're trying to do more of in Ireland.

"To be frank, we didn't do as much of this as we would have liked during the financial crisis.

"This is an area of our business that we're trying to grow in Ireland and we'd like this to be a signal to other financial institutions that this form of lending from the EIB is available."

Mr McDowell said about 0.20pc would be knocked off the borrowers' cost of funding as a result of the EIB finance.

Also Read


DLL in Ireland is a leasing company, not a bank. It can use the funds to provide leasing or hire-purchase to farmers or builders, but cannot lend working capital or for land purchases.

Fergal O'Mongain, group treasurer and country manager for DLL Ireland, said the finance would be of three to seven years duration.

DLL has already acted as an intermediary for EIB funds in Germany, Poland, Spain, Portugal, Sweden, the Netherlands and Italy.

"We're doing a certain element of this business anyway, so it's nice to be able to pass on the discount.

"We, as a company, operate on a global stage and we partner with the EIB in the Netherlands. But this year is the first time that we've done anything with Ireland."

Mr McDowell will be in Dublin today to sign the new €100m engagement with DLL and is also due to speak at a European Movement event, alongside Finance Minister Pascal Donohoe.

In September the EIB launched a fresh lending initiative for Irish businesses as it ramped up its involvement in the economy ahead of Brexit.

That €300m financing scheme is aimed at medium-sized firms and represented the first time the EIB has extended funds directly to this segment of the market.

Mr McDowell said the EIB will hit its record lending target in Ireland of €1bn this year.

The Luxembourg-based body is also, along with the State, underpinning by way of a financial guarantee the €300m Brexit loan scheme announced in the Budget to help provide working capital to firms impacted by Brexit.

EIB President Werner Hoyer will be in Ireland next week to formally launch the scheme.

It also supported the state's agricultural cashflow loan scheme announced in Budget 2017 to help firms in the agricultural sector deal with Brexit.


For Stories Like This and More
Download the FarmIreland App


Indo Business

Get the latest news from the FarmIreland team 3 times a week.





More in Agri-Business