Agricultural finance institution benefiting from interest rate reversal – criticism of green bonds
jsc/frankfurt food
Since the reference interest rate for renewable energy is very high, the Agrarische Rentenbank, like other development institutions, only provides a small amount of money. But now interest rates are falling and business is growing faster, says the head of the bank Nikola Steinbock in an interview with Börsen-Zeitung.
After a very weak new business so far, the Agrarische Rentenbank expects a revival this year: Although a high reference interest rate previously made incentive loans for renewable energy unattractive, business ‘ raise due to interest rates which are now falling, says the board’s spokesperson. Nikola Steinbock in an interview with Börsen-Zeitung. “Fortunately, we are expecting a strong November and December.”
In the first half of the year, the bank promised program loans worth 1.5 billion euros good across all financing sectors. New business with renewable energy had dropped to almost zero. The bank is now targeting around 4 billion euros for the year as a whole. In the previous year it had reached 5.9 billion euros. Low willingness to invest remains a problem, says Steinbock. It is therefore impossible for farmers to predict whether an investment in animal stables will pay off. “There is a lack of design security.”
“Green bonds alone do not promote ESG. “
With eight green bonds from 2020, Rentenbank is an important issuer for sustainability-oriented investors. The institute uses this to refinance its renewable energy lending business. Due to high demand from investors, the bank is sticking to refinancing through green bonds, says the manager. However, the lenders did not achieve a positive impact as the bond issue was related to existing assets and no new business was created. “Green bonds alone do not promote ESG. “
Steinbock mentions a private placement as another option: “Investors could define in advance which projects they are donating money to. ” From the point of view of the head of the bank, this could improve the living conditions of animals. Measuring reliable goals is important, she says.
Agriculture will “never be climate neutral”
In addition, the bank wants to subsidize future farmers who break down their greenhouse gas emissions. An interest bonus is also designed to ensure an “intelligible amortization path”. At the same time, Capricorn warns against expectations that are too high. “Agriculture will continue to decline, but it cannot be climate neutral.”
2024-10-24 18:49:00
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