European Investment Bank collaborates with Rabobank in a €1 billion small and medium-sized enterprise financing agreement
Headline: European Investment Bank Boosts Green Investment in the Netherlands and Beyond
The European Investment Bank (EIB) has been a significant player in supporting the Netherlands' economic growth over the past ten years, providing more than €27 billion in financing across various sectors. This investment has been instrumental in areas such as research and development, transport, drinking water, healthcare, and small and medium-sized enterprises (SMEs).
Recently, the EIB pledged €1 trillion of green investment in the decade to 2030, with a particular focus on climate financing as a key driver of economic growth. This commitment underscores the bank's dedication to combating climate change and promoting sustainable development.
In a recent development, Rabobank, a Dutch multinational cooperative bank, will receive a €500 million loan from the EIB to support small-scale sustainability and agriculture projects in the Netherlands. Rabobank's subsidiary, DLL, will also receive a portion of this funding. This collaboration aims to enhance their ability to provide more accessible, affordable, and tailored leasing solutions.
Rabobank and DLL have further committed to matching their respective loans, resulting in a total of €1 billion in new funding. DLL plans to use this money to boost funding for local sustainability investments in several European countries, including France, Germany, Italy, Spain, Belgium, Sweden, Poland, Ireland, and the Netherlands.
Meanwhile, SHIFT Invest has announced a €92m first close of an impact fund. This fund falls under the categories of Climate & environment, Infrastructure, and Private equity, and is expected to make a significant impact in areas such as biodiversity and EU funding.
The OECD's 2021 report highlighted the crucial role that SMEs play in achieving net zero emissions. SMEs collectively account for a considerable portion of energy consumption and greenhouse gas emissions. However, their innovations and adoption of sustainable technologies can facilitate climate change mitigation and adaptation. Supporting SMEs through funding and tailored financial solutions can reduce barriers to investing in sustainable technologies.
A separate study found that UK pension funds overlook impact reports in their investment decisions. This finding underscores the need for increased awareness and consideration of the environmental and social impact of investments.
In Malaysia, CFM and Argos Partners will manage a shariah-compliant infrastructure fund. This fund is expected to contribute to the development of sustainable infrastructure projects in the country.
In conclusion, the EIB's continued investment in the Netherlands and other European countries, alongside the commitments of institutions like Rabobank and DLL, underscores the importance of recognising SMEs as essential contributors to the solution in climate action efforts towards net zero emissions. The focus on impact funds and sustainable infrastructure projects highlights the growing recognition of the need for green investment in the fight against climate change.
[1] OECD (2021), Small and Medium-Sized Enterprises (SMEs) and the Transition to a Low-Carbon Economy, OECD Publishing, Paris, https://doi.org/10.1787/9789264320914-en. [2] HM Treasury (2021), Impact Investing for Pensions: A Review, HM Treasury, London, https://www.gov.uk/government/publications/impact-investing-for-pensions-a-review/impact-investing-for-pensions-a-review.
- The European Investment Bank (EIB) has pledged €1 trillion in green investment over the next decade, showing a commitment to combating climate change through finance and business, with a focus on climate financing as a key driver of economic growth.
- The development sector is also seeing an increased focus on private equity investments that have a significant impact on areas such as biodiversity and EU funding, as evidenced by SHIFT Invest's first close of an impact fund.
- In the realm of pensions, increased awareness is necessary to ensure investment decisions consider the environmental and social impact of investments, as a separate study found UK pension funds often overlook impact reports.
- The collaboration between the EIB, Rabobank, and DLL in funding small-scale sustainability and agriculture projects demonstrates the potential for private equity and finance to support SMEs, which are crucial in climate action efforts towards net zero emissions, as per OECD's 2021 report.
