Rabobank teams up with the European Investment Bank on a €1 billion small and medium-sized enterprise financing agreement.
In a significant move towards achieving net zero emissions, the European Investment Bank (EIB) has announced that it will provide loans totaling €1 billion to Rabobank and its subsidiary DLL. This funding is aimed at supporting small-scale sustainability and agriculture projects in the Netherlands, as well as boosting access to funding for local sustainability investments from SMEs and mid-caps in several European countries.
The move aligns with the EIB's commitment to provide about €1 trillion in green investments through 2030, a pledge that underscores the bank's commitment to climate action. The funds will be categorized under Development finance, Housing, Infrastructure, and Social impact, reflecting the bank's comprehensive approach to sustainable development.
The role of Small and Medium-sized Enterprises (SMEs) in achieving net zero emissions cannot be overstated. According to the OECD's 2021 report, SMEs account for a significant share of energy use, emissions, and pollution. However, many SMEs are also innovators and adopters of green technologies, making them an important part of the broader transition to net zero.
Lara Yocarini, a member of the managing board at Rabobank and CEO and chair of the executive board of DLL, stated that the EIB loan will enhance their ability to provide more accessible and affordable leasing solutions for sustainable equipment and technology. This, in turn, will accelerate SMEs' contribution to net zero goals.
The EIB's support for SMEs extends beyond direct financing. By partnering with financial institutions such as Rabobank, the EIB helps SMEs overcome barriers to investing in sustainable equipment and technology. This partnership is a key pathway toward achieving net zero emissions in Europe.
The OECD also highlighted that an increasing number of small businesses and entrepreneurs are trying to slash their footprint through innovations, which may contribute to technological solutions for climate mitigation and adaptation.
Elsewhere, the People's Partnership and Good Things Foundation are working together to address digital and financial exclusion in the UK. Meanwhile, DEG has signed a $50 million funding agreement to support women-led businesses in Tanzania, a collaboration that falls under the Financial inclusion and Social impact categories.
Jean-Christophe Laloux, EIB director general, emphasized that climate financing is a key driver of economic growth and that the facility can convince other financiers to make available more support for entrepreneurs developing more sustainable projects. The EIB has already provided the Netherlands with more than €27 billion in financing in various sectors over the past ten years.
In conclusion, the strategic engagement of SMEs by the OECD and the targeted green financing initiatives by the EIB are pivotal in the journey towards achieving net zero emissions in Europe. By supporting sustainable projects and enabling SMEs to invest in green technologies, these institutions are fostering a more sustainable and resilient European economy.
References: [1] European Investment Bank. (2021). European Investment Bank to provide €1 billion in green financing to Rabobank and DLL. Retrieved from https://www.eib.org/en/press/news/2021-09-14.2021-eib-to-provide-1-billion-in-green-financing-to-rabobank-and-dll
[2] OECD. (2021). Small and Medium-sized Enterprises (SMEs) and the Energy Transition. Retrieved from https://read.oecd-ilibrary.org/view/?ref=10.1787/9789264318501-en#:~:text=SMEs%20play%20a%20crucial%20role,and%20pollution.%20Despite%20their%20size
- The European Investment Bank's (EIB) €1 billion loan to Rabobank and DLL is part of their development finance efforts, aimed at sustainable development and addressing climate-change by supporting small-scale sustainability projects.
- In line with their €1 trillion green investments plan through 2030, this funding will be categorized under Housing, Infrastructure, Development finance, and Social impact, reflecting the EIB's commitment to environmental-science and social impact.
- Financial inclusion is another focus area for the EIB, evident in their $50 million funding agreement to support women-led businesses in Tanzania.
- SMEs, which account for a significant share of energy use, emissions, and pollution, play a pivotal role in achieving net zero emissions, as innovators and adopters of green technologies.
- By providing more accessible and affordable leasing solutions for sustainable equipment, the EIB's loan to Rabobank and DLL will accelerate SMEs' contributions to net zero goals, and it serves as a key pathway toward achieving net zero emissions in Europe.
- To foster a more sustainable and resilient European economy, the strategic engagement of SMEs by institutions like the OECD and the targeted green financing initiatives by the EIB are essential, helping SMEs invest in personal-finance, education-and-self-development, and technology that address climate-change and promote business growth.
