EU Bank supports development of Ukraine’s economy through EUR 400m loan to strengthen the country’s agri-food sector
- Release date: 28 December 2015
- Reference: 2015-320-EN
The European Investment Bank (EIB) lends EUR 400 million to Ukraine to finance projects implemented primarily by SMEs and Mid-caps in the agri-food sector, in order to help the country benefit from the opportunities offered by the Deep and Comprehensive Free Trade Area (“DCFTA”) established by the Association Agreement with the European Union.
At the signing ceremony, Heinz Olbers, EIB’s Director for Operations in Neighbourhood Countries, stated: “The future of Ukraine and the Ukrainian people remains of utmost importance to the EU and to the EIB. The loan signed today will support the agri-food sector, which is of great significance for Ukraine, given its long tradition and competitive advantages in this sector. The loan project has been designed to remove key bottlenecks in investments that will help Ukrainian enterprises realise their competitive potential on national and global markets”.
Prime Minister of Ukraine, Arseniy Yatsenyuk, commented: “Through its support to Ukrainian agri-food SMEs in upgrading production and processing technologies and developing new storage and logistics capacity, this loan will help Ukrainian SMEs respond to the historic opening of EU markets to Ukrainian produce and to the ongoing approximation of Ukrainian national standards to EU norms. The project, designed through the close interaction of Ukrainian authorities, EIB services and EU specialists, both contributes directly to Ukraine’s new strategy for the agricultural sector and represents a key milestone in Ukraine’s journey to modern and efficient agri-food production”.
EIB funds will provide longer term finance to support investments by SMEs and Mid-caps, as well as public service providers, along the entire value chain. Potential beneficiaries therefore include input suppliers, farmers, processors, storage and logistics operators, as well as testing laboratories, research and education institutions and extension services that contribute to the functioning of target value chains.
The cereals, oil seeds and aquaculture and fisheries value chains are being targeted by the loan, having been identified as those best placed to satisfy domestic demand for quality produce and increase the competitiveness of the sector and its exports to the EU and global markets, in line with trade liberalisation and standards harmonisation commitments made by both sides of the EU-Ukraine DCFTA. The EIB loan will be made available through the Government of Ukraine, and is expected to be supported further by the EU through grants made available by its Neighbourhood Investment Facility.
The EIB, the EU bank, is committed to supporting Ukraine and has adopted a set of exceptional measures to finance EUR 3 billion of new loans, for the period 2014 - 2016 as part of the EUR 11 billion EU support package that the European Union committed to in March 2014. The EIB is well on track in this regard, as the Bank has provided support to Ukraine, including the current loan, amounting to EUR 1 257 million in 2015 and EUR 940 million in 2014.
The EIB – the European Union’s bank – finances projects in Ukraine on the basis of an EU Council and European Parliament mandate for Eastern Neighbourhood countries. The mandate enables the Bank to support projects of significant interest to the EU and its Eastern Neighbours in the areas of local private sector development, social and economic infrastructure and climate change.
Support to stabilising the Ukrainian economy and to enabling Ukrainian enterprises to take advantage of the opportunities offered by the new trade regime with the EU under the Deep and Comprehensive Free Trade Area, is particularly relevant in the EIB approach to identifying and developing projects in conjunction with its Ukrainian counterparts.