Welsh farmers to access low-interest green loans under new government scheme

Daniel Bevan - Editor

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Welsh farming businesses will soon be able to access affordable finance to modernise their operations and reduce carbon emissions under a new loan scheme being introduced by the Welsh Government.

The Sustainable Agriculture Loan Scheme (SALS) will be launched later this year and delivered by the Development Bank of Wales, offering farms fixed-rate loans of 3% to support investments in energy efficiency, waste management and productivity improvements.

Under the scheme, small and medium-sized farms will be able to borrow between £25,000 and £1 million per project, with repayment periods of up to 15 years.

Up to £5 million will be made available during the 2026/27 financial year, with the potential for further funding if demand proves strong.

The loans will include a six-month repayment holiday at the start, allowing businesses time to realise the benefits of their investment before repayments begin.

Seasonal repayment options are also being considered to reflect the financial cycles of farming businesses.

Huw Irranca-Davies, Deputy First Minister with responsibility for Climate Change and Rural Affairs, said: “I’m pleased that we’re able to work with the Development Bank of Wales on this new scheme which will be another way of supporting Welsh farming businesses to modernise and remain financially sustainable.”

Giles Thorley, Chief Executive of the Development Bank of Wales, said: “Supporting farm businesses with patient and flexible funding packages is critical at a time of much transition in the sector.

“We look forward to working closely with Welsh farmers to support new projects enabling them to both ‘invest to save’ and enhance their future sustainable farming delivery.”

The scheme will align with Wales’ Sustainable Land Management duties and operate alongside the rollout of the Sustainable Farming Scheme.

Initially, the programme will run as a 12-month pilot and further information is available from the Development Bank of Wales.

NFU Cymru President Abi Reader said: “NFU Cymru very much welcomes today’s SALS announcement.

“Access to finance to undertake productivity and efficiency improvements is often cited as a barrier to undertaking investment on farm.

“This is particularly true for young farmers, new entrants and those who do not own the land they farm.

“In 2023, NFU Cymru’s Next Generation Development Group launched the union’s Framing the future for the next generation report, where one of the key recommendations was for Welsh Government to implement provisions for farmers struggling to access finance to support investment in sustainable food production and to help reduce carbon emissions.

“We are therefore pleased that the new loan scheme launched by Welsh Government today and delivered by the Development Bank for Rural Wales seeks to do just that.

“The union is also encouraged that the Deputy First Minister has already confirmed that the SALS scheme will be complementary to existing Welsh Government grant schemes and the Sustainable Farming Scheme.

“NFU Cymru will be studying the information being published by the Development Bank for Rural Wales to see how this will work in practice.”