The collaboration aims to expand the regenerative agriculture transition through improved access to finance for farmers, while supporting banks to achieve their green finance goals.
The International Finance Corporation (IFC), a member of the World Bank Group, and Danish climate fintech, Agreena, have announced a groundbreaking financial services partnership to advance sustainable farming across Eastern Europe. This first-of-its-kind collaboration aims to expand the regenerative agriculture transition through improved access to finance for farmers, while supporting banks to achieve their green finance goals.
IFC is the largest global development institution focused on the private sector in emerging markets. Agreena will be working with the institution’s Europe Sustainable Finance Project, which provides advisory services to increase the flow of climate finance towards initiatives and projects across a range of sectors, including agriculture.
The partnership aims to help banks support their agricultural customer portfolio in switching to more sustainable farm operations and unlock bank lending to farmers who can face a ‘finance gap’ in the early years of transitioning to regenerative farming. With many farm businesses operating on thin margins, the demand for new equipment and the risk of short-term production losses can make the move to regenerative agriculture challenging, despite its ability to deliver long-term social, economic, and environmental benefits.
“By partnering with Agreena, IFC is committed to accelerating the transition to regenerative agriculture in Eastern Europe,” said Liliana Pozzo, IFC Sustainable Finance Advisory Services Manager Latin America and the Caribbean and Europe. “This collaboration not only helps farmers reduce their carbon footprint and enhance biodiversity but also equips financial institutions with the tools needed to support farmers during this critical transition period.”
Financial institutions have a unique position to promote and help drive the adoption of regenerative agriculture due to the scale of their lending to farmers across Europe. In parallel, pressure is mounting to reduce so-called ‘paper decarbonisation’, the act of reducing emissions by reshuffling portfolios. Instead, banks are being asked to provide more evidence of the impact of their green lending, while also doing more to help their clients become more sustainable.
Agreena is already developing solutions for banks who are seeking to build strong sustainable finance offers in the agriculture sector. Drawing on its expertise as the developer of Europe’s largest soil carbon programme, Agreena leverages its farmer interface and advanced Measurement, Reporting, and Verification (MRV) capabilities to assist banks with granular, verified farm-level data, to support eligibility documentation for green finance offers.
“Agreena is extremely excited to embark upon this new strategic alliance with the World Bank’s IFC – it is a bold step towards a new era of regenerative agriculture finance,” said Frederik Aagaard, Chief Commercial Officer at Agreena. “The agricultural sector is one of the largest contributors to greenhouse emissions, but it can also be a leader in the fight against climate change, and banks have a key role to play in unlocking this potential. Our collaboration with IFC will enhance banks’ awareness of regenerative agriculture and soil carbon removals and support them with documentation. We also plan to explore new solutions for the market, such as carbon credits for loan repayment and green bonds,” added Aagaard.
