KENYA – The European Investment Bank (EIB) has unveiled a US$66.2 million (Kshs6.62 billion) financial package for onward lending to farmers and agro-processors servicing demand-driven contracts in Kenya.

Dubbed the Kenya Agriculture Value Chain Facility, the financing program was launched in Nairobi with the sopport fron the European Union.

EIB signed a partnership with Equity Bank, a Kenyan based financial institution, in the scheme designed to tackle specific investment gaps currently hindering expansion in the sector.

The new initiative represents the first dedicated support for long-term investment by agriculture companies in Africa backed by the European Investment Bank, the world’s largest international public bank.

European Union delegation to Kenya Charge’ d’Affairs Walter Tretton said US$57 million (Sh5.7 billion) will be lent out on a long-tenure basis of seven years on a collateral-free basis and will be managed by Equity Group

A further US$9.62 million (Sh962m) will be availed in two equal halves, one as a loan managed by Equity Bank and another as a grant to be given to successful applicants by the facilitator Self Help Africa.

Working with Equity Bank across country, the new Kenya Agriculture Value Chain Facility will help agricultural companies modernize and harness the full economic, employment and export potential of agriculture as well as expand business with local smallholders.

“The EIB is pleased to strengthen our close cooperation with Kenyan partners and the European Union Delegation to ensure that agricultural investment can increase under an exciting new scheme that acts as a model for our engagement across Africa” said Catherine Collin, European Investment Bank regional representative for East Africa.

Equity Group (Kenya) managing director Polycarp Igathe added that this will unlock farmers’ potential to meet market demand in volume and quality while enabling farmers directly link up with retail chains.

“Farmers have to demonstrate ability to grow crops, access to a guaranteed ready-market and proof of commercial farming earnings.

“We have employed a director of agriculture to lead our agricultural team of experts that will directly engage farmers offering technical assistance from farm husbandry to marketing,” he said.

The engagement with the lender will help formulation of homegrown solutions to financing agriculture with farmers actively involved in the process of creating products that address needs for affordable capital.

Last year, horticultural farmers earned farmers US$1.242 billion (Sh124.2 billion) for exporting 497,000 tonnes of fresh produce, reports Business Daily.