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Irish banks have given a cautious reaction to the €1bn EU loan fund announced by European Commissioner for Agriculture Phil Hogan on Monday.
Access to the fund for Irish young farmers will depend on it being drawn down by Irish financial institutions.
Spokespeople told the Irish Farmers Journal that AIB would “look forward to reviewing further details regarding this fund”, Bank of Ireland look[s] forward to reviewing details of the initiative and [is] keen to explore what is being proposed”, and Ulster Bank is “always open to working with partners such as the EIB and the European Commission”.
At least 10% of EIB funds must go to farmers under 41, with other agri-food businesses inlcuding co-ops also eligible.
Individual agreements with banks will define this share and other terms and conditions such as the discount applicable to the local market interest rate.
“It will be the cheapest money available to young farmers,” a spokesperson for Commissioner Hogan said.
An EIB spokesperson said it can sign agreements with established lenders within two months, after which the banks have one year to lend to farmers and businesses.
All countries will offer up to 15-year terms and five-year grace periods before repayments start.
Other rules such as the availability of the loans for investment and/or working capital, as well as the need to put up land or other property as collateral or not, remain to be agreed between the EIB and each bank. Leasing companies can also avail of the scheme to finance investments such as machinery.
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