IFC arranges $100m financing for Ukrainian grain trader

The World Bank affiliate will provide a $60m loan from its own account and help facilitate an additional $40m in financing to support Nibulon’s efforts to increase its trading volume.

The World Bank-affiliated International Finance Corporation has arranged a $100 million financing package to support growth plans of Nibulon, Ukraine’s largest grain trader.

The IFC will provide $60 million from its own account and the remainder will be provided by other lenders, according to the statement.

The financing will be used to refinance Nibulon’s existing short-term debt, modernize the company’s shipping terminal on the Black Sea port of Mykolaiv and support its ambitions to increase trading volume by 40 percent over the next four years, according to the statement.

“This investment is well-aligned with our strategy to help Ukraine maximize its agribusiness potential through modernization and better access to finance and knowledge,” IFC’s regional head for Ukraine and Belarus, Jason Pellmar, said in the statement. “Unleashing that potential will help increase exports, create jobs, boost Ukraine’s economy and contribute to global food security.”

Nibulon exports corn, wheat and barley sourced from a network of 4,700 farmers across Ukraine to customers in more than 20 countries. Headquartered in the southern city of Mykolaiv, the company owns and operates a network of grain silos, a seaport trans-shipment terminal and a shipbuilding facility that manufactures grain barges and tug boats.

IFC global industries director Alzbeta Klein told Agri Investor last year that Ukraine is an important market for IFC, reflecting the development finance institution’s willingness to provide financing during periods when other investors see markets as too risky. Klein estimated that the IFC works with about 15 agri producers in Ukraine and in April, the IFC provided a $37 million loan to support the $150 million construction of a new grain port at the south-western Ukrainian port of Yuzhny.

In an interview on the Nibulon website published in March, Nibulon chief executive officer Oleksiy Vadaturskyy said that he supported efforts to lift a moratorium on the sale of agricultural land in Ukraine, a country of 44 million people where agriculture accounts for 14.4 percent of GDP.

Vadaturskyy said that the current “shadow” system of land and grain sales in Ukraine reduces incentive of farmers to work legally and that Nibulon intends to buy land if the moratorium is lifted.

“Today we have a remarkable feature in Ukraine: everyone is talking about the lifting or extension of the moratorium, but no one is talking constructively, [about] what to do to lift the moratorium and run a real civilized land market,” he said. “It is necessary to create a land market, but if you set it up right now, it will be a disaster in a village – neither farmers nor companies will be able to protect their rights.”