EBRD lives up to agri commitment with latest deals

The European Bank for Reconstruction and Development (EBRD) closed two agribusiness deals last week in Ukraine and Macedonia.

It committed $50 million to a syndicated loan facility for Ukrainian grain processor Kernel Group and issued a $4 million loan to branded food producer Vitaminka in Macedonia.

The DFI has been planning to increase its investment into the agribusiness sector across central and Eastern Europe, Gilles Mettetal, director of agribusiness at EBRD told Agri Investor in September. And earlier this month, the organisation earmarked $1 billion for Ukraine specifically.

The total syndicated loan to Kernel Group amounts to $230 million and is part of a larger revolving facility of up to $400 million provided by a group of banks including Citibank, BNP Paribas, Natixis and Rabobank.

The lenders were advised by law firm CMS.

The loan will provide working capital for Kernel’s procurement of grain in Ukraine and its storage, transportation and trans-shipment.

EBRD also issued a $4 million loan to branded food producer Vitaminka in Macedonia last week.

The confectioner and potato chip producer will use the loan to modernise two of its production plants and purchase energy efficient technology. EBRD considers Vitaminka to be one of the stronger SMEs in the region.

The company exports over 45 per cent of its products, primarily to Serbia, Croatia, Bosnia and Herzegovina, Slovenia, Kosovo, Australia and the USA.

EBRD has invested $12.6 million into Vitaminka since 2007. The DFI is a vital source of funding for Ukraine’s agriculture sector which accounts for 15 percent of Ukrainian gross domestic product. The bank has committed almost $12.4 billion through 337 projects in the country so far this year.

“The EBRD and IFC are the most important sources of financing for Ukraine’s agribusiness sector now,” Voldymyr Lapa, general director at the Ukrainian Agribusiness Club (UCAB), an association for the sector, told Agri Investor. “We really need the financing but I am not sure how far it will stretch across the industry.”