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EBRD Financing Helps Support Ukrainian Agricultural Exporter

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EBRD and EU support small Ukrainian agricultural exporter

By Anton Usov

Project paves way to better quality export oriented farming, sets high industry standards

The European Union (EU) – jointly with the European Bank for Reconstruction and Development (EBRD) – have put in place the SME Direct Support Facility (Facility) for small and medium sized businesses (SMEs) in the countries of the Deep and Comprehensive Free Trade Area (DCFTA). The Facility supports increase of SMEs’ competitiveness, ease their access to finance, helps them with new trade opportunities and compliance with new food safety, technical and quality standards, as well as with environmental protection measures.

The latest project under the EU-EBRD DCFTA SME Direct Support Facility – and first of its kind in Ukraine – is a US$ 5 million loan to LLC “V.V. Kischenzi” (Kischenzi), a privately owned diversified agricultural producer based in the Cherkassy region of central Ukraine.

Kischenzi, operates a variety of businesses ranging from grains and vegetables growing to dairy and pig farming. Around 60 per cent of its output is successfully exported to the European Union and other markets.  The loan will be covered by a first loss guarantee from the EU grant under the above Facility.

The proceeds of the loan will be used to upgrade its fleet of combine harvesters and to acquire supplementary agricultural equipment like cultivators. The project will help Kischenzi strengthen its export potential and implement modern state-of-the-art farming technics and standards thus creating a successful benchmark for the industry in Ukraine.

By supporting this transaction the EBRD and the EU are continuing to provide more resources to support agribusiness, a key growth driver of the Ukrainian economy – and help small businesses in Ukraine unlock new opportunities available under the Deep and Comprehensive Free Trade Area.

The Associated Agreement between the European Union and Ukraine including the Deep and Comprehensive Free Trade Area (DCFTA) will enter into force as of 1st of January 2016. The EU pays a special attention to support of the private sector, especially smaller businesses, so they can benefit from this agreement, stimulate economic growth and create jobs in Ukraine.

The EBRD and EU are also cooperating on DCFTA-related activities in Moldova and Georgia, the two other eastern European countries that have signed Association Agreements with the EU.

These activities are part of the larger DCFTA Facility for SMEs, which will unlock new investments for small and medium-sized enterprises in the three countries, largely from new loans by international financial institutions, such as the EBRD and the European Investment Bank (EIB). For more information on DCFTA in Ukraine, please visit the EU Delegation website.

The EBRD is the largest international financial investor in Ukraine. As of 1 January 2016, the Bank had a total cumulative commitment of €11.9 billion in 357 projects throughout the country.

{Source: European Bank for Reconstruction and Development}

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[photo credits-featured image: By LutzBruno (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons]

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