• Support farm modernisation, diversification and competitiveness.
• Enable investment in sustainable and climate-relevant solutions.
• Facilitate generational renewal and business creation in rural areas.
• Strengthen agrifood value chains and regional economic resilience.
• Maximise the impact of CAP and cohesion funding through strong leverage effects.

By combining EAFRD and ERDF resources in one coherent framework, FOSTER also helps achieve goals to improve policy coherence and ensure that EU funding streams work in a complementary and efficient way to support rural development and agricultural transformation.

Activities

FOSTER operates as a blended financial instrument combining public and private expertise and contributions. Public funding from EAFRD, ERDF and the Occitanie Region is pooled into an investment support fund within a structure managed under professional financial standards. It is implemented through financial intermediaries such as well-known regional banks. Private capital is mobilised alongside public resources, significantly increasing the total investment available to final recipients.

The instrument primarily provides first-loss portfolio guarantees, innovation honour loans, and equity investments. These mechanisms reduce risk for lenders, allowing banks to offer loans with better conditions, lower collateral requirements, and longer maturities, particularly suited to agricultural investments. Farmers benefit from upfront financing activity rather than retrospective grants, allowing projects to start faster and progress at the right time in the production cycle.

Under its first phase, between 2010 and 2023, the instrument’s actions combined bank guarantees, innovation honour loans, and equity funds to finance thousands of SMEs and farms across the region. Building on this success, FOSTER II was launched in June 2024, offering attractive guarantees (up to 80 %) and favourable loan conditions via partner banks. Its focus broadens competitiveness, innovation and sustainability goals under the 2021-2027 EU funding period.

Such FOSTER activities can support:

• Farm modernisation and diversification, e.g. awarding guaranteed finance has enabled the construction of modern livestock facilities, acquisition of additional breeding stock and installation of photovoltaic panels.
• Processing and value-added investments, including equipment for fruit, vegetable, grain, and meat processing, supporting shorter supply chains and local markets, e.g. a fruit producer installing on-farm juice processing.
• Infrastructure and building investments, such as agricultural buildings, storage facilities, and on-farm processing units, e.g. a livestock farm upgrading storage and processing buildings.
• Forestry and agro-industry projects, contributing to diversification and climate resilience, e.g. a forestry enterprise investing in local wood processing and diversification.

At the portfolio level, banks, including Banque Populaire du Sud, financed thousands of agricultural and agri-food projects under FOSTER 1, with average loan sizes and maturities suited to long-term rural investments.

The FOSTER II phase (2023–27) continues these activities by reinforcing alignment with CAP objectives on sustainability, competitiveness, and rural vitality. The combined EAFRD-ERDF structure demonstrates how combining funds within a single instrument can maximise leverage, reduce fragmentation, and increase overall impact.

• In total, including the synergies from ERDF alignment, approximately EUR 220 million of public resources mobilised in the first phase generated over EUR 1.3 billion in financing for final recipients, achieving leverage of roughly six to eight times the public contribution.
• More than 8 500 SMEs and farmers benefited during the first FOSTER phase, involving significant support for agri-food and forestry sectors.
• In the early years of the 2023–27 period (2024–September 2025), 1 125 SMEs were financed for EUR 258 million, including 305 farms and agri-businesses receiving EUR 31 million.
• Under the agricultural-focused FOSTER TPE-PME-AGRI framework, around EUR 27 million of EAFRD and regional funds are forecast to catalyse EUR 135 million in new agricultural loans, benefiting over 1 000 rural projects.

The strong leverage results demonstrate how relatively small CAP contributions can catalyse large volumes of private capital, making public funding more efficient and widely accessible. Aligning EAFRD and ERDF within a single instrument further improves coherence and impact from FOSTER results, an approach that will be increasingly important to optimise EU funding complementarity.

FOSTER results show how financial instruments can multiply the impact of EU funding, delivering more investment, faster deployment, and wider reach than grant-only approaches, while directly supporting CAP priorities.

Outcomes underscore that CAP financial instruments strengthen the long-term autonomy of farmers, agri-food businesses, and rural ecosystems by reducing reliance on recurrent public funding. By providing upfront finance and sharing risk with lenders, results from these instruments also enable farmers to invest earlier, grow faster, and build economically viable businesses capable of standing on their own. This supports more resilient food supplies, stronger rural value chains, and enhanced delivery of ecosystem services linked to sustainable land management and climate action.

Key lessons

• FOSTER highlights how CAP financial instruments help everyone by making public money go further and finance more affordable and accessible. By providing upfront funding and sharing risk with lenders, these instruments accelerate investment, demonstrate clear additionality, and unlock projects that might not proceed under grant schemes alone.
• Using robust ex-ante assessment expertise to align EAFRD and ERDF within a single fund can help significantly enhance efficiency and policy coherence, an approach that can become increasingly useful to optimise EU funding complementarities. The model shows strong potential for climate action, farm modernisation, and also microfinance in rural areas.
• The FOSTER experience (and the detailed good practice analysis provided by DG AGRI’s practical design features modelling this financial instrument via www.fi-compass.eu) confirms that similar CAP financing models can be successfully delivered by a wide range of InvestEU partners and regional actors, making them adaptable, scalable, and highly relevant