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A new £5 million pilot scheme is offering fixed-rate loans of up to £1 million for agricultural businesses investing in renewable energy and efficiency.

Farming businesses across Wales can apply for low-interest loans from Wednesday July 1 to help fund energy efficiency and renewable energy projects.

The Sustainable Agriculture Loan Scheme (SALS) will offer fixed-rate loans at 3% interest, with repayment terms lasting up to 15 years.

Run by the Development Bank of Wales, the £5 million pilot scheme allows eligible agricultural businesses to borrow between £25,001 and £1 million.

The funding is designed to help local farms deal with rising input and energy costs by financing waste management, new equipment, and renewable energy generation.

To qualify for the scheme, businesses must manage at least three hectares of eligible land or prove they work more than 550 standard labour hours a year.

Llyr Gruffydd, the Welsh Government’s minister for rural resilience and sustainability, said: “Welsh farmers are ambitious and forward-thinking, but the up-front cost of investing in a more sustainable, resilient future can be a real barrier. 

“This scheme reflects our commitment to support the agriculture sector in a way that underpins the long-term sustainability of farm businesses and promotes innovation and growth.”

The year-long pilot will also look at introducing seasonal repayment options to match the fluctuating cashflow patterns of the agricultural calendar.