The International Finance Corporation, a member of the World Bank Group, will provide a $37 million loan to support the construction of a new grain terminal at Ukraine’s Yuzhny port, a project that has a total estimated cost of $150 million.
IFC’s financing matches that of the European Bank for Reconstruction and Development, whose board approved a loan for the same amount in September 2016.
“We have already started the construction works at the Yuzhny port,” said Andrii Stavnitzer, director of MV Cargo, a special purpose company established for the development and operation of the project and co-owned by TransInvestService (TIS Group), one of the largest Ukrainian groups of private port terminals. “Our plan is to have the new grain terminal operational by spring 2018.”
The project, in addition to building a new grain terminal with a throughput capacity of up to 5 million tons per year, includes grain storage and rail intake facilities, as well as dredging and construction works at Berth No. 25. MV Cargo will construct the terminal facilities, while the Ukrainian Sea Ports Authority has agreed to undertake and assume the $50 million cost of dredging the approaching channel to a depth of 16 meters. This will enable the new terminal to handle large vessels with a deadweight of up to 100,000 metric tons.
Under the terms of an agreement MV Cargo signed with Cargill in February 2016, the US-based global commodities trader will acquire post-construction a 51 percent stake in the joint venture that will operate the terminal. Cargill has not disclosed the financial terms of the agreement and had not responded to a request for comment by press time.
According to the IFC, the project will support the continued development of the country’s farming sector, which accounts for approximately 20 percent of GDP and around 40 percent of total exports.
The World Bank Group member is a leading investor in Ukraine’s agricultural sector having committed about $845 million in the last six years. It also offers an advisory program focused on simplifying regulations for agribusiness, expanding access to finance for farmers, encouraging commercial bank lending to the sector, and developing the agri-insurance market.