Product can finance new technology
CBA has introduced a new loan to support agribusiness customers as they transition their businesses to become more sustainable, and to invest in environmental projects.
The Agri Green Loan provides upfront funding for farmers wanting to invest in eligible initiatives that reduce their greenhouse gas emissions, build on-farm climate resilience, or enhance their nature capital, CBA said.
It follows the launch of carbon footprint monitoring in August, enabling CBA customers to track their carbon footprint through the CommBank app, and is in line with initiatives introduced by lenders and aggregators in pursuit of making a positive difference to the environment.
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The launch of the Agri Green Loan follows a pilot program, under which participants were offered funding at discounted rates. Funds were used to invest in eligible initiatives that enhanced natural resources and climate resistance.
CBA group executive, business banking Michael Vacy-Lyle (pictured above) said agriculture represents a “core sector” of the Australian economy. It was “crucial” to support the sector to deliver a purposeful transition, he said.
According to the Australian Bureau of Agricultural and Resource Economics and Sciences, the agriculture sector represents around 12% of the country’s exports, Vacy-Lyle said.
The drive towards greater sustainability is creating more opportunities for agribusinesses, he said.
“Agribusinesses are continuing to take actionable steps to reduce their environmental impact and often also enhance farm productivity. Many of our customers are transforming their operations by investing in new technology and upgrading infrastructure to reduce emissions or adopt more sustainable farming practices,” Vacy-Lyle said.
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CBA said one of the pilot participants was VRM Biologik, a soil restoration innovator based in Queensland, used the program to accelerate the implementation of its patented regenerative farming technology.
As a longstanding advocate of sustainable agriculture, VRM Biologik founder and president Ken Bellamy said the pilot helped to align the company’s sustainability, strategic and financial goals, generating positive environmental outcomes for the business and its clients.
Using Agri Green Loan funds, CBA said VRM Biologik used its regenerative farming practices to grow mustard from seed during frost over winter at a property near Miles in western Queensland.
“The Agri Green Loan helps the whole industry to become more sustainable as farmers can look to improve their own regenerative growing practices or invest in other environmental projects,” Bellamy said.
Examples of how the loan could be used include switching to regenerative farming practices, converting degraded land to improve soil quality, planting trees or shelter belts, or installing renewable energy, CBA said.
The terms and conditions of CBA’s Agri Green Loan include no establishment fee and a discounted rate. On August 25, the variable rate for loans under $1m is 3.99%.
For businesses wanting to enhance their sustainability and manage the impacts of the transition, CBA also offers sustainability linked loans and energy efficient equipment finance.
