Emirates Development Bank has launched the first-ever food security loan made available to the UAE. EDB has allocated close to $27.2 million to provide financing for agriculture technology (agritech) loans programs. Targeting farmers, local producers, technology providers, equipment suppliers, and more, the loans will go to financing and uplifting the UAE’s food sector.
In a recent statement, EDB explains that the initiative is in line with the UAE’s plans to become a global leader in agriculture and agricultural innovation. “We understand UAE food security is fundamental to the long-term health and well-being 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 UAE is hoping to rank first on the Global Food Security Index by 2051. Naqbi goes on to say, “Leveraging our competitive and accessible financing solutions, we aim to facilitate the adoption of advanced technology and cutting-edge solutions, contributing to the realization of this strategic vision.”
Read: Agriculture sector in UAE to contribute AED 19.3 bn to GDP by 2025
Increased domestic food production would ensure food independence, and enhance supply chain resilience. In addition to that, farmers looking to optimize their processes can turn towards more precise agricultural techniques that incorporate more sustainable practices. Whether this looks like vertical farming or turning towards hydroponic methods of farming is up to the borrowers, although farmers are encouraged to turn to transformative technologies.
Given the nature of the agricultural industry, the schema of these loans takes into account longer breakeven points. EDB’s AgriTech financing program will provide up to 2.5 years of a grace period before the loans must be paid back. The program provides funding for both new and existing projects in the fields of green and brown development. It offers financial support for project costs, capital expenses, and day-to-day operations. Additionally, it provides medium-term loans or working capital funds of up to $1 million, with attractive interest rates and a repayment period of ten years.
The bank’s agritech financing program includes the option of grace periods that can last up to 2.5 years. This program also offers a loan-to-value ratio of up to 90 percent, meaning borrowers can receive funding for up to 90 percent of the value of their project.
In line with the UAE’s five priority sectors, food security, renewables, manufacturing, technology, and healthcare, EDB will continue to offer financing to over 13,500 companies, with an allocated support budget of over $8 billion to be approved by 2026.
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