The European Investment Bank, the European Union’s multilateral debt financier, last week agreed a €120 million loan to support horticulture SMEs and micro enterprises in Moldova. One of the main aims of this debt financing is to improve the sector’s competitiveness, improve product quality and better facilitate exports to the wider European Union, which makes up 54 percent of Moldova’s overall export market.
The project is targeting the development of the fruit industry in particular, and has been dubbed ‘the fruit garden of Moldova’. The project is in sync with an upcoming EU initiative called the European Neighbourhood Programme for Agricultural and Rural Development, which already has €64 million in commitments from the European Union.
Agribusiness and agriculture are not a priority sectors for the EIB yet and the bank’s involvement is the sector is largely demand driven. Since Moldova became eligible for EIB finance in 2007, the bank has signed 13 deals in the country, netting over half a billion euros in value.
The loan was issued directly to the Moldovan government, with internal finance channels responsible for on-lending to eligible businesses. The EIB also has influence in determining which enterprises will be eligible for the loans, according to a spokesperson. The EIB always lends through intermediaries within the target country.