Banks offering discounted finance products for green and sustainable lending
With almost three quarters of Australia's family farmers saying they are making more money than a decade ago, agribusiness bankers attribute at least some of those financial gains to producers investing in new technology, labour-saving equipment, more efficient machinery and greater economies of scale.
Further incentivising producers to invest has been growing awareness of sustainability demands coming from the marketplace and wider community. Farmers are also acknowledging greater responsibility for environmental and economic legacies to be inherited by their family's next generation.
Meanwhile, bank lending incentives have emerged to reward farmers' improved environmental goals, encouraging them to spend on more emissions-friendly equipment and land management strategies.
Take a look at some on offer:
Commonwealth Bank of Australia recently launched a discounted Agri Green loan pitched at helping farmers invest in environmentally beneficial projects ranging from farm shelter belts and soil improvement initiatives, to more fuel efficient machinery, solar powered pumps and batteries, or improving water use efficiency. Commonwealth's Agr Green loan began as a pilot concept last year. Officially launched in August at a 3.99pc interest rate (now 4.74pc), Agri Green loans can be meshed with property lending if environmental projects are planned for new farmland acquisitions.
Together, Canberra's Clean Energy Finance Corporation & ANZ Banking Group are offering loans of up to $5 million at a 0.5pc discounted business rates for borrowers investing in assets to cut greenhouse gas emissions, including precision farming gear and renewable energy equipment, or making energy efficiency upgrades. CEFC's $200m contribution complements previous co-financing programs with other financiers which have lent about 5500 to small and medium-sized business borrowers.
A potential indication of Westpac's plans has emerged in New Zealand where it is piloting a new sustainable finance loan for farming customers "to align its banking operations with a net zero emissions future". The bank already offers interest-free loans of up to $40,000 for efficiency upgrades to NZ homeowners insulation and heating systems. The discounted ag sustainability pilot loan requires customer to meet a criteria on reducing emissions, improving long-term resilience, more sustainable water use, waste and ecosystems.
CBA's agribusiness banking executive general manager, Paul Fowler, said it reflected how the society-wide push for more sustainability was creating fresh agribusiness opportunities to help farm efficiency, resilience and long term productivity.
Article Attrition - Queensland CountryLife
(Please note this is not financial advice, do research and contact your bank to check whether this is right for you before committing to anything.)