Welsh farming businesses will be able to access affordable finance to modernise their operations and cut carbon emissions, under a new loan scheme to be launched by the Welsh Government and delivered by the Development Bank of Wales later this year.

The Sustainable Agriculture Loan Scheme (SALS) will offer incentivised loans at a fixed 3% interest rate, repayable over up to 15 years, to help small and medium-sized farms invest in energy efficiency, waste management and productivity improvements.

Up to £5 million will be available during the 2026/27 financial year, with the potential to extend the scheme depending on demand.

Farms will be able to borrow between £25,000 and £1 million per project. A six-month repayment holiday at the start of the loan gives businesses time to see the benefits of their investment before repayments begin. Seasonal payment options are also being considered.

SALS makes a clear policy choice: public finance should be used as a repayable, targeted tool to drive sustainable farming practices — complementing existing Welsh Government grants.

Deputy First Minister with responsibility for Climate Change and Rural Affairs, Huw Irranca-Davies, 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.”

The scheme will be aligned to the Wales's Sustainable Land Management duties as well as working in a complementary way with the roll out of the Sustainable Farming Scheme.

The pilot will initially run for 12 months.

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.”