EBRD invests into Mediterranean agri, food security

The European Bank for Reconstruction and Development invested €871m into the agribusiness sector in 2013, including €60m in commitments to the southern and eastern Mediterranean region.

The European Bank for Reconstruction and Development (EBRD) invested €871 million into the agribusiness sector in 2013 through 54 transactions, according to the bank’s annual report. The commitment was just shy of the €874 million invested in 2012.

EBRD also mobilised an extra €110 million in loans that were syndicated to commercial banks.

EBRD made a notable effort to commit capital to the southern and eastern Mediterranean (SEMED) region, a new area of focus, and invested €60 million into four projects there. These included a local currency loan to the Juhayna Group, a leading integrated dairy and fruit juice producer in Egypt, and a loan to Moroccan fruit juice producer Citruma; these were both firsts in the region.

In an effort to enhance the agricultural value chain in some areas, EBRD invested €50 million of equity capital into MK Group, an agricultural and energy conglomerate, recapitalising the company and enabling it to finance an irrigation system, silo construction and to buy land.

EBRD’s commitment to food security — the Private Sector for Food Security Initiative that was launched on 2011 — helped create more liquidity in primary agriculture to enable farmers to invest in their farms and boost output. It did this through increased cooperation with a number of banks to implement agriculture and agribusiness credit lines.

It also supported legal frameworks for pre- and post-harvest financing mechanisms, such as warehouse and crop receipt systems, in Russia, Serbia and Ukraine.

The bank also continued to work with both the private and public sectors on communication. Alongside the FAO, EBRD facilitated an agreement between the Ukraine Grain Working Group and the Ukraine government to ensure that public officials notify the group of any plans to restrict exports in advance. This policy dialogue enabled EBRD to invest €400 million into Ukraine’s grain sector and stimulate the private sector.

EBRD and FAO set up a similar working group for Ukraine’s dairy sector at the request of the industry and government, according to the report.