Altum-Services-Enterprises-Loans with capital discount-Conditions for primary agricultural production pro-jects

Conditions for primary agricultural production projects

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LIIA selects the primary agricultural production projects for investments and decides on approval and further processing of applications. Only those investment projects that have received approval from LIIA can qualify for a loan with the capital rebate.

The capital rebate is the full or partial reduction of the principal amount of ALTUM’s loan. The maximum amount of the capital rebate for the project is determined immediately at granting of the loan, whereas the actual amount of the capital rebate depends on the project’s performance during the post-monitoring stage.

 Which primary agricultural production projects qualify for ALTUM’s loan with a capital rebate:

Projects relating to primary agricultural production aiming to develop and adapt agriculture and establish and modernize agricultural infrastructure
The initial investment necessary for implementation of the project exceeds 30% of the previous five-year average annual turn over of the company
The company corresponds to the status of medium-sized and large enterprise
The project complies with NACE Section A ‘Agriculture, Forestry and Fishing’, except forestry or fishing/aquaculture
Implementation of the project has not been commenced prior to submission of the application to Altum and inspection carried out by Altum at the project’s implementation site

Terms of loan:

maximum loan per investment project - up to 30% of the eligible costs of the investment project*

Maturity - up to 20 years

Additional requirements for large enterprises

The application must be submitted together with a hypothetical scenario for implementation of the investment project, where the undertaking proves that:

the investment project could not be implemented in absence of such aid or could be implemented in a limited or different manner

no operating costs that the undertaking would incur anyway are subsidized and no regular risk of the economic activity is offset

the amount of aid does not exceed the minimum necessary for the project to be sufficiently profitable

In preparing the hypothetical scenario, the merchant uses the guidelines for large merchants applying for support for primary agricultural production to prepare the justification for the hypothetical scenario of the investment project. Using the guidelines, large enterprises shall determine the amount of the loan according to one of the options:

the aid may not increase the IRR1 of the project beyond the normal rates of return applied by the respective company to other similar investment projects
the aid may not increase the IRR of the project beyond the total cost of capital of the company
the aid may not increase the IRR of the project beyond the return ratios normally observed in the sector concerned
An undertaking needs a Category A or B permit for polluting activity or registration of Category C polluting activity, if the project provides for installation of construction and stationary equipment on livestock farms

The undertakings may submit the applications, but it should be noted that aid for primary agricultural production undertakings will actually be available after the European Commission has agreed on implementation of the aid.