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IFC backs Ukrainian agri producer with $35m debt package

The financing package for Astarta, one of the country's biggest agri producers, comprises a $15m loan from IFC and $20m from private investors.

The International Finance Corporation (IFC), a development finance arm of the World Bank, has arranged a $35 million financing package for Astarta, one of the country’s biggest agri producers, as the company seeks to boost soybean production in Ukraine.

The all-debt investment comprises a $15 million loan from IFC and $20 million in debt from other investors. The deal will help Warsaw stock exchange-listed Astarta, the country’s largest refined sugar producer, finance its soybean crushing operation and diversify its business.

A spokeswoman for IFC told Agri Investor the names of the private investors involved could not be disclosed, but that “typically commercial banks” participate in these types of IFC deals.

“[This investment] highlights how IFC helps Ukrainian agribusiness producers play a bigger role in global food security. We believe in the competitive advantages of the Ukrainian agricultural sector and are working to facilitate more investments into this vital part of the Ukrainian economy,” Rufat Alimardanov, IFC country manager for Ukraine and Belarus, said in a statement.

Ukraine’s agri sector has been hit by the ongoing conflict with Russia in the Crimea. Ukraine‘s agribusiness sector accounts for around 20 percent of employment in the country and one-quarter of its exports. Ukrainian grain alone makes up around 10 percent of global grain exports. Last year the United States Department of Agriculture forecast the country’s wheat output would dip in the wake of a 40 percent devaluation of its currency, the hryvnia. 

Given that prices for most grains, dairy and sugar are now low and the macroeconomic situation remains unstable, we are focusing our efforts on increasing efficiency, cutting costs and ensuring profitability,” Viktor Ivanchyk, Astarta’s chief executive said.

IFC is focused on mobilising the private sector to invest in emerging markets, and has invested nearly $18 billion in businesses globally. In July the firm lent $60m to the Romanian subsidiary of the global agribusiness group Smithfield Foods to support its farm processing growth and in June backed Zambian agribusiness Agrivision Africa with a $20 million equity investment.