The Land and Agricultural Development Bank (Land Bank) on Wednesday announced the start of a new funding facility geared towards the support of climate change adaptation and mitigation projects.
The €50-million facility, secured through the European Investment Bank (EIB), is set to strengthen the capacity of farmers to prepare, adapt and become resilient to the impacts of a changing climate.
“An important part of our mandate at Land Bank is to work with all of our stakeholders to build an adaptive and competitive agricultural sector that contributes to food security. With this facility in place, we are better positioned to support farmers and agribusiness to deal with the challenges of climate change and ensure limited disruption of agricultural production,” Land Bank CEO TP Nchocho said in a statement.
The facility features a 12-year repayment period with favourable terms. The available funding will be channelled to climate action projects that have a lifespan of two years or longer and are focused on improving natural resource management, strengthening business continuity and contributing to a reduction in energy and water use in food processing.
Over the past year, Land Bank has worked diligently to diversify its sources of funding to continue supporting growth and transformation in the agricultural sector.
“This project comes at a very important time and underlines the importance of planning ahead to ensure sustainability of our scarce resources. Through partnerships like this one with the Land Bank, the EIB can support various types of projects carried out by small and medium-sized enterprises in the agricultural sector. In addition to having a positive impact on the climate, the facilities will also underpin job creation,” EIB Pretoria head Tome Anderson said.
Germany’s KfW Development Bank last week signed an agreement for a R900-million loan to Land Bank to assist it with refinancing its loan book and extending longer-term financing to both emerging and established commercial farmers.