A €250 million loan to boost the Kernel Group’s sunflower oil and renewable energy production and improve trade and agri-infrastructure in Ukraine was approved by the European Investment Bank.
The long-term financing operation is covered by the EU Political Risk Guarantee for EIB loans outside the EU to cover capital expenses in FY 2019. It will enable the Ukrainian company to improve trade and export logistics and cut post-harvest losses through the construction of two new inland grain silos and a grain handling and storage terminal located in the Port of Chornomorsk, EIB said.
The loan to the Kernel Group will also help the country meet climate action objectives and contribute to its infrastructure through the construction of five renewable energy combined heat and power plants (CHP) based on biomass, EIB said. The construction of a sunflower oil crushing plant, which will incorporate the best available technology, will also allow the company to be more resource efficient, consolidate its competitive position and therefore increase its market share both in Ukraine and the EU, the bank stressed.
Kernel is the world’s largest producer and exporter of sunflower oil and a major supplier of agricultural products from the Black Sea region to world markets. Kernel exports its products to more than 60 countries. Since November 2007, its shares trade on the Warsaw Stock Exchange.
EIB expects these investments to create more than 2,200 jobs during their implementation and about 600 permanent jobs after project completion.
EIB vice-president Vazil Hudak said: “The agreement underlines the important role of the EU bank in supporting employment in Ukraine, modernizing agribusinesses and deepening cooperation between the country and the EU. This project strengthens Ukraine’s economic competitiveness and improves lives for the rural population.”
EIB has also funded other investments by large agricultural companies in Ukraine, including construction of a new tomato production and processing line by AgroFusion Group (€21.4 million) and the upgrading of Nibulon’s infrastructure (€71 million in 2016).