The European Investment Fund (EIF) has signalled its intention to commit €40m to a new fund aimed at transitioning the continent to a “fairer, healthier and more-sustainable system”.
The EIF said in a statement the commitment would take place under its InvestEU programme and the fund, to be known as the European Agri Transition Fund, will support small and medium-sized enterprises (SMEs) and small mid-caps in the agricultural and food sectors.
Managed by Switzerland-based INOKS Capital, it has a target size of between €150m and €300m and plans to hold a first closing for professional investors in 2024. “It is an innovative investment fund with the goal of accelerating the transition to a fairer and more sustainable agri-food system in Europe,” added the EIF.
European Commissioner for the Economy Paolo Gentiloni said: “The InvestEU programme is supporting investments across Europe that will boost the transition to a low-carbon and more sustainable economy. I am glad this agreement will channel financing to SMEs and small mid-caps in support of these EU goals. This is a very good example of how InvestEU helps small and medium-sized businesses to make Europe greener and fairer while contributing to sustainable growth and food security.”
Sustainable production and consumption
The fund aims to enhance sustainable production and consumption, particularly in eastern and southern EU countries, including Bulgaria, Croatia, the Czech Republic, Greece, Hungary, Italy, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia and Spain. The beneficiary companies will target these goals throughout the entire agri-food value chain – from input supply, production,and logistics to processing, distribution and waste reuse. The fund will primarily offer senior debt providing short, medium and long-term investments secured by real asset collateral.
The European Agri Transition Fund is designated as an Article 9 fund under the Sustainable Finance Disclosure Regulation. A significant portion of the portfolio companies will support climate action and environmental sustainability goals, in line with the EIF’s criteria.
The external alternative investment fund manager will be Altarius Asset Management and the EIF added: “The fund’s approach to its performance fee and financing rate structure aims to ensure both the investment manager and portfolio companies are incentivised to achieve ambitious impact key performance indicators aligned with the EU Green Deal objectives.”
