The European Commission and the European Investment Bank (EIB) have presented a model guarantee instrument which could deliver hundreds of million of euro in new investment to generate jobs and growth in the Irish rural economy up to 2020.
The new instrument aims to help ease access to finance for farmers and other rural businesses by enabling member states to use their rural development programmes (RDPs) to lever further investment funds.
The Commission stated that member states and regions could utilise the model to set up financial instruments funded by their RDPs to secure loans for investments in farming, food processing and marketing, business start-ups and other associated areas.
It is anticipated that the model guarantee and investment instrument will be used to fuel investment in the wider rural economy.
Speaking in Brussels, EU Agriculture Commissioner, Phil Hogan, said the financial instruments would help get more value out of rural development policy.
"By getting credit flowing more freely, they can turn one euro of public money into two euros, three euros or even more of secured loans to help our farmers, particularly young farmers, and other rural entrepreneurs, create growth and jobs. The joint work by the Commission and the EIB, set out in detail today, marks a huge step forward towards making that happen," Commissioner Hogan said.
Reacting to the announcement, ICOS said the new fund had the potential to drive investment in Irish agriculture and the rural economy.