European Investment Bank supports climate-harmful industrial agriculture projects in the Global South, report finds

Today, ActionAid International and Counter Balance publish “The European Investment Bank’s development and climate finance – what’s in it for sustainable agriculture?”, a report critically examining the European Investment Bank’s (EIB) ongoing support for unsustainable agriculture projects in the Global South, exposing stark contradictions with its stated climate commitments and the Paris Agreement.

Agricultural funding from the EIB, the world’s largest multilateral development bank, continues to promote agriculture practices that have negative impacts on the climate and small farmers’ livelihoods, promote unsustainable export-oriented agriculture, and lock countries in the Global South in food insecurity and poverty. 

Key findings show that by the end of 2023, the EIB had EUR 5 billion in outstanding loans to the agriculture and forestry sector, with an estimated EUR 800 million directed towards agribusiness projects outside the EU. From 2020 to 2022, the EU provided EUR 337 million in guarantees for agribusiness loans by the EIB and other European Development Finance Institutions (DFIs). Case studies illustrate that the EIB’s financing supports cash crops, resource-intensive and industrial agricultural practices, and large corporations with obscure financing models and management while lacking proper environmental and human rights impact assessments.

Hamdi Benslama, EU Advocacy Advisor at ActionAid International, said: 

“Industrial agriculture is the second largest contributor to climate change after fossil fuels and, at the same time, the most at risk from climate impacts. The EIB has boosted its levels of climate lending, but it fails to invest in sustainable agriculture which has limited profitability. The Bank therefore fails to demonstrate the development and climate additionality of its investments which alone can justify the use of public money. The EIB is supporting an unsustainable agriculture model that locks vulnerable communities and countries into food insecurity and debt."

Alexandra Gerasimcikova, head of policy and advocacy at Counter Balance, added: 

“The EBI and other DFIs prioritise private investors in the agrifood sector, worsening already prevailing imbalances of power and wealth in the food system at the expense of small farmers, who provide food for up to 70% of the world’s population. Agriculture support in developing countries remains a token gesture in the EIB's portfolio, echoing a wider trend that sees the economic risks and limited profitability of agriculture projects as a deterrence for their financing."

Frank Vanaerschot, director at Counter Balance, concluded: 

“To be a truly progressive force on climate issues, the EIB should cease funding export-oriented agribusiness projects that displace labour, livelihoods, and local knowledge, and must protect small-scale farms by financing a transition from intensive, industrial agricultural methods to sustainable and agroecological systems, which reduces emissions and empowers communities. Only in this way, it will effectively address both its climate footprint and vulnerability."