The document discusses innovative financial solutions for agribusiness provided by the European Investment Bank (EIB), focusing on supporting SMEs, microfinance, and larger corporates through various financing channels. It outlines EIB's approach to addressing social and environmental challenges in the Pacific region, emphasizing the importance of risk-sharing instruments and direct financing to enhance social impact. Additionally, it highlights the Caribbean and Pacific Impact Finance Facility (CPIFF) aimed at facilitating loans for micro and small enterprises, particularly in underserved sectors.

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

2. European Investment Bank
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

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

4. 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

5. 5European Investment Bank
Loans to Financial Intermediaries
Social Impact Funds Risk-sharing Instruments
Direct Financing
- 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
- 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
IFE Instruments

6. 6European Investment Bank
The Caribbean and Pacific Impact
Finance Facility (CPIFF)
Financial intermediaries
-Microfinance institutions
-Downscaling banks
-Wholesale funder of MFIs
Eligible clients with loans < EUR
50,000:
-Micro and small enterprises
-Low income households with small
scale impact projects
LENDING
FACILITY 40 m
EUR
TECHNICAL
ASSISTANCE
FACILITY
Senior debt
3- 7 years with 1-2 year grace period
Unsecured
Local currency, EUR and USD
Fixed interest rate
Tailored capacity building
Financial education
Mentoring

7. 7European 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

8. European Investment Bank
EIB in the Pacific
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
Pacific Regional Office
Level 25, 88 Phillip Street
SYDNEY NSW 2000 Australia
Thank you!

9. Example: ACP Smallholder Farming
9
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

10. 10European Investment Bank
Cotonou Agreement: Resources and Amounts
Investment Facility (IF) revolving fund
* Instruments also available under IF
EIB Own Resources
European Development Fund – EDF
(EU Member States’ budgetary funds)
Amounts available under 11th EDF 2014-2020
⇒ ACPs EUR 634 m
⇒ OCTs EUR 5 m
⇒ ACPs up to EUR 2,500 m
⇒ OCTs up to EUR 100 m
• Senior loans*
• Intermediated loans*
• Widely traded
currencies
• Interest rate subsidies
• Technical Assistance
Total capital endowment under
9th , 10th and 11th EDFs
⇒ ACPs EUR 3,637 m°
⇒ OCTs EUR 48.5 m
• Junior or subordinated loans
• Quasi-equity funding
• Equity funding
• Guarantees
Local currencies
°Including EUR 500m ‘impact financing’ envelope