The sustainable production of enough food to sufficiently nourish the population is one of the biggest challenges in developing countries. With its long-term loan of up to USD 15 million to the Latin American Agribusiness Development Corporation S.A. (LAAD), OeEB has made a significant contribution towards reaching this goal in Central America: the proceeds from the loan will be used to finance small and medium enterprises in the Central American agricultural sector.
As lead-financier, OeEB also succeeded in mobilising further funds for the project; the OPEC Fund for International Development (OFID) provided a further USD 15 million. The entire loan will be used to secure access to finance by agricultural enterprises in countries such as Nicaragua, Honduras and Guatemala. In this way, LAAD can continue to offer its clients long term loans.
Modernisation for sustainable production
The United Nations' Food and Agricultural Organization (FAO) predicts that food production must be increased by 70% by the year 2050 in order to feed a growing global population. In order to achieve this, the productivity of the agricultural sectors in developing countries must be considerably raised. "This loan will enable small and medium enterprises in Central America to take urgently needed steps to modernise," says Andrea Hagmann, member of OeEB's executive board. Furthermore, jobs will be created in rural areas, where poverty is particularly widespread.
LAAD not only possesses a high level of know-how in the field of agribusiness finance, but also considers sustainable productions as one of its most important concerns. "One of LAAD's priorities is compliance with international environmental and social standards," adds Hagmann. "This is also a reason why the loan will contribute to pioneering agricultural projects in Central America."