AIB has launched a new low-cost agri green and transition loan product available to all farming sectors.

The loans, which are for amounts between €2,000 and €100,000 are repayable for a term up to seven years. The variable interest rate is currently at 4.95%. That interest rate is referenced from three-month EURIBOR, a euro-area financial industry benchmark lending rate.

In order to qualify for a loan, farmers must be a member of a recognised environmental scheme such as Bord Bia Quality Assurance, Irish Grain Assurance, a Department of Agriculture environmental scheme such as ACRES, a processor sustainability programme or be an organic farmer.

While loans will be for environmental purposes, they cover a large range of investments such as renewable energy, pollution control, biodiversity, afforestation and non-fuel-based machinery (including electric tractors). The loans do not cover the purchase of land or livestock and cannot be used for working capital needs or to refinance existing AIB loans.

Donal Whelton is head of agriculture, food and fisheries at AIB.

“This new, low-cost green and transition loan is a practical demonstration of AIB’s commitment to sustainability and to the agricultural sector,” he said.

“We understand farmers from all sectors are working hard to reduce emissions to reach Government targets of 25% reduction in greenhouse gas emissions by 2030 and this low-cost loan will provide a tangible support to farmers seeking to invest in green and transition practices.”

AIB has a maximum unsecured cap per individual of €100,000 so depending on circumstances the loans under this scheme can either be secured or unsecured.

Bank of Ireland offers its Enviroflex sustainability loan product for farmers in the dairy and tillage sectors who meet similar criteria to those for the new AIB product.