30 million loan to Scandagra Group in support of sustainable land use
- EBRD providing €30 million loan to Scandagra Group, a leading agribusiness trader in the Baltic states
- Financing will fund expansion of new agricultural practices, including organic production
- Scandagra Group is a joint venture between two cooperatives
In a significant contribution to the development of green agribusiness in the Baltic states, the EBRD is providing Scandagra Group AB with a loan of up to €30 million for its long-term working capital needs.
Scandagra Group is active in Estonia, Latvia and Lithuania as an agribusiness trader and inputs supplier to over 1,000 farmers operating in those countries. The company is a joint venture between the Swedish cooperative Lantmännen ek. för and the Danish cooperative Dansk Landbrugs Grovvareselskab a.m.b.a. (DLG), both leading agri-cooperatives in Scandinavia and northern Europe.
The EBRD financing will mainly be used to support Scandagra in expanding and promoting organic, sustainable and innovative agricultural practices in the Baltic states, including through R&D and engagement with farmers, scaling up test fields, sales of organic inputs and purchasing organic outputs.
Technical cooperation funds of up to €60,000 will be mobilised for training farmers to promote the proliferation of organic production and expand the use of biological input in farming.
Agriculture is an important sector of the economies of the Baltics states but challenges exist, especially regarding competitiveness and sustainability. Organic production offers one potential response but development so far remains below its potential. The EBRD loan is designed to address this issue in areas where Scandagra Group is active, for instance in the grain market.
The loan is provided under the EBRD Green Economy Transition (GET) approach, a strategy which sets the EBRD on course to dedicate 40 per cent of its annual investment to green finance by 2020. The Bank is well on the way to achieving this objective. The loan is the first EBRD project focusing on the sustainable land use aspect of the EBRD’s GET strategy.