- EUR 250m loan to expand seed-oil production, agri-infrastructure and renewable energy production of Kernel Group
- Investment increases efficiency of agricultural sector and stabilises farmers’ revenues by avoiding crop losses thanks to expanded storage facilities
- 2 200 jobs during implementation and 600 permanent jobs after project completion
The European Investment Bank (EIB) has agreed to lend EUR 250m to Kernel Group, one of the largest diversified agribusiness companies in the Ukraine. The loan will support the expansion of Kernel’s seed-oil production capacity, significantly improve its logistics structure, finance the construction of biomass-fired combined heat and power plants and increase storage capacity across several regions of Ukraine.
EIB Vice-President Vazil Hudák commented: “The agreement signed today underlines the important role of the EU bank in supporting employment in Ukraine, modernising agribusinesses and deepening the cooperation between the country and the European Union. This project strengthens Ukraine’s economic competitiveness and improves lives for the rural population. The EIB’s support for the private sector in Ukraine ranges from big companies like the Kernel Group to small and medium-sized companies.”
Agriculture is a strategic economic sector in Ukraine, generating some 20% of GDP and providing employment for many of the 14 million citizens living in rural areas. The EIB has already funded various investments by large agricultural companies in Ukraine, such as the modernisation and innovation of the Astarta-Kyiv holding company (EUR 37m in 2017), construction of a new tomato production and processing line by Agrofusion Group (EUR 21.4m in 2017) and the upgrading of the infrastructure of the agricultural company Nibulon (EUR 71m in 2016).
The loan to Kernel Group will also help to meet climate action objectives through the construction of five renewable energy power plants based on biomass. It will finance the development of modern storage facilities to reduce post-harvest losses and mitigate adverse weather impacts. It will contribute to the efficient transformation of prime commodities through investment in seed-oil production.
In the context of the Deep and Comprehensive Free Trade Agreement (DCFTA) signed between Ukraine and the EU and the recently passed environmental legislation in Ukraine, the Kernel Group has committed to further strengthen its environmental and health and safety standards. It is expected that these investments will create more than 2 200 jobs during their implementation and about 600 permanent jobs after project completion.