EDB launches AgriTech loans scheme and plans to offer $27m to support food security sector

Initiative will target farmers, local producers, technology providers, equipment suppliers and others

Bustanica vertical farm in Dubai. AgriTech is a key element of the UAE’s National Food Security Strategy 2051. Photo: Bustanica
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Emirates Development Bank, the state-owned lender that provides financing for the UAE's priority sectors, has introduced an agriculture technology loans programme, with plans to allocate Dh100 million ($27.2 million) in financing support for the country's food security sector.

The initiative is aimed at boosting the national agriculture sector in line with the UAE's plans to become a global leader in agricultural innovation, EDB said.

It will target farmers, local producers, technology providers, equipment suppliers and those involved in the agriculture support ecosystem.

The programme offers green and brownfield project financing, capital expenditure and working capital financing, and medium-term loans or working capital amounts of up to Dh5 million with "competitive rates" and a long tenor of 10 years.

“We understand UAE food security is fundamental to the long-term health and wellbeing of the population. As the UAE's development bank, it is our top priority to transform the nation into a regional hub for local food production in line with the National Food Security Strategy 2051," said Ahmed Al Naqbi, chief executive of Emirates Development Bank.

The National Food Security Strategy 2051 aims to put the UAE at the top of the Global Food Security Index by 2051.

It sets out plans to develop a comprehensive national system based on enabling sustainable food production by using modern technologies, while enhancing local production.

World's biggest R&D vertical farm opens in Abu Dhabi

World's biggest R&D vertical farm opens in Abu Dhabi

“EDB's commitment to empowering the agricultural community aligns with the UAE's national agenda, which places utmost importance on achieving food self-sufficiency and reducing dependence on imports," Mr Al Naqbi said.

"By fostering collaboration between financial institutions and the agriculture sector, EDB aims to catalyse the growth of domestic food production, enhance supply chain resilience and contribute to the nation's economic development.”

The bank is providing direct and indirect financing to UAE companies and projects across its five priority sectors – manufacturing, renewables, advanced technology, food security and health care.

It has set aside Dh30 billion for direct and indirect lending to more than 13,500 companies in those sectors by May 2025, when its current five-year plan ends.

EDB aims to approve loans worth Dh6 billion or more in this year, to at least match the Dh6.1 billion of financing last year, Mr Al Naqbi told The National in March.

The financing approved last year marked an increase of nearly eight times on an annual basis.

EDB provided loans to about 180 companies last year, Mr Al Naqbi added, with the bulk of them being small enterprises, including 50 to 70 under the “micro” businesses category.

While Dh1.8 billion in loans was approved for small and medium enterprises last year, the funding approved for large corporates rose to Dh4.3 billion.

Loans disbursed through the EDB micro-lending platform powered by Beehive stood at more than Dh100 million.

For this year, EDB will focus on building more tailor-made financing solutions for AgriTech, Mr Al Naqbi said at the time.

“AgriTech and farming require a very specialised kind of financing because of the longer breakeven points of those projects. So we are looking to launch this year a specialised product that is for that sector,” he said.

Through the AgriTech loans programme, EDB aims to help the agricultural sector innovate and optimise yields, the lender said.

It is offered with a loan-to-value (LTV) ratio of up to 90 per cent to provide increased financial flexibility and support to borrowers in the agricultural technology sector, to enable the swift adoption of technologies, EDB said.

The programme provides repayment periods of up to 2.5 years.

The financing support provided will "facilitate the implementation of precision agriculture techniques, state-of-the-art irrigation systems and advanced crop monitoring tools, propelling the sector towards more sustainable practices and heightened productivity", it said.

Updated: June 20, 2023, 8:30 AM