PROTIX (IEU GT)

Promoter – Financial Intermediary

PROTIX BV

Location

• Poland

Description

The project will finance the construction and operation of an insect breeding, rearing and processing plant to produce animal feed material in Poland. In particular, the plant will use low-grade agriculture and agri-food residues streams as feedstock to produce high-value and highly nutritional quality products for the animal feed and pet food industries. The unit is planned to upcycle around 270ktonnes of low-grade stream from surrounding agro-industries into 60ktonnes of Live Larvae Equivalent of proteins, lipids and organic fertilizers.

Additionality and Impact

The operation, under Thematic Green Transition, is in line with the InvestEU objective of Sustainable Bioeconomy. It concerns the financing of an innovative commercial scale insect farm operation in Poland.

The innovativeness of the project, lies in its capacity to integrate the entire production process from the insect nursery, rearing and processing, to the final product which is high value proteins and lipids for the feed industry and fertilizers, as a by-product for soil enhancer. The project is a scale-up of a commercial pilot designed and operating in the Netherlands. The project is fully aligned with key EU policies, namely the Farm to Fork strategy as part of the Green Deal, the Bioeconomy Strategy and action plan and the Circular Economy Strategy.

The operation will contribute to the deployment of a production technology, upcycling low grade stream form surrounding agro-industries, hence lowering environmental footprint of feed and food production systems. It therefore reduces negative environmental externalities compared to produce that it will most likely substitutes i.e. soy protein and oil. Furthermore, the operation will address the market failure of access to finance for new SMEs without a track record and in an innovative sub-sector of the bioeconomy.

The development of an efficient insect farming new technology will result in the generation of positive knowledge externalities. The project is considered 100% circular based on a number of qualities. The insect facility will generate positive social impacts through the creation of new skilled employment and technology in a transition region of Poland. The operation faces implementation risks associated with the scaling-up from a smaller industrial scale facility into a large facility, which will be the largest insect farm in Poland and one of the largest in Europe. Unmitigated operational risks include market risks (i.e. insufficient consumer demand) and high bargaining power of clients (large feed producers). The management team is deemed to have the skills and experience to manage the implementation and operational risks. The Promoter is a new client for the EIB. EIB's involvement provides additional financial flexibility, diversifies the funding base, and unlocks long term funding for the implementation of this project, which would not be otherwise accessible to the Company via commercial banks. It also provides a signalling effect to other investors in the market supporting future fund raising.

The project would not have been carried out (to the same extent) by the EIB without the InvestEU support.

Objectives

The aim is to deploy and operate a technology-built facility for insect breeding, rearing and processing at industrial scale. The related technology has already been developed by the promoter and deployed at commercial scale in the Netherlands. The investment is expected to generate significant social economic benefits, mainly on account of its circularity features and a reduced environmental and carbon footprint compared to the production of conventional feeds/food. Furthermore, the deployment of the technology will increase the overall resource efficiency of the promoter's existing industrial activities.

Sector(s)

• Industry - Manufacturing

Proposed EIB finance (Approximate amount)

EUR 37 million

Total cost (Approximate amount)

EUR 165 million

Environmental aspects

Compliance with the Environmental Impact Assessment (EIA) directive 2014/52/EU amending the EIA Directive 2011/92/EU) will be assessed during appraisal, as well as well compliance with and other applicable environmental acquis.

Procurement

The promoter has been assessed by the EIB as being a private company not being subject to EU rules on public procurement or concessions. However, if at the project appraisal, the EIB were to conclude that the promoter is subject to the EU public procurement legislation then the Bank will require the promoter to ensure that contracts for implementation of the project will be tendered in accordance with the applicable EU procurement legislation as interpreted by the Court of Justice of the EU, with publication of tender notices in the EU Official Journal, as and where required.

Status

Signed - 22/12/2023