Ukraine: EU Bank launches new scheme to strengthen the agri-food sector
2 December 2019
The European Investment Bank (EIB) has launched the Agri-Food Value Chain Project, which is backed by a loan of up to EUR 400m from the EU bank, along with donor-backed technical assistance, in order to support small and medium-sized enterprises (SMEs) and mid-caps in Ukraine. The programme is intended to help Ukraine benefit from the opportunities offered by the Deep and Comprehensive Free Trade Area (DCFTA) established under the Association Agreement with the European Union (EU).
At the launch event, Marion Hoenicke, Head of Division in the EIB’s Neighbouring Countries Department, stated: “The programme launched today will support the agri-food sector, which has enormous growth potential, given its long tradition and competitive advantages. With the support of the European Union as well as the United Kingdom through the Eastern Partnership Technical Assistance Trust Fund (EPTATF), the EIB is stepping up its efforts to improve access to finance and build capacity in order to support sustainable and inclusive growth in Ukraine.”
The EIB funds will provide long-term finance to support productive 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, and storage and logistics operators, as well as testing laboratories, research and education institutions and extension services that contribute to the functioning of the target value chains.
The cereals, oil seeds and aquaculture/fisheries value chains are being targeted by the programme, as they have been identified as being best placed to satisfy domestic demand for quality produce and to increase the competitiveness of the sector and its exports to the EU and global markets.
The EIB loan will be made available through financial intermediaries to private and public sector final beneficiaries, and is further supported by the EU and the United Kingdom through a combined grant amount of EUR 5.5m for technical assistance services. Based in Kyiv, the technical assistance project team – lead by the Denmark-based consulting firm NIRAS – will work on two main levels, providing support and advice to intermediary banks (including commercial banks and agricultural leasing companies) lending to SMEs and mid-caps in the cereals, oilseeds and fisheries sectors, and also directly to beneficiary SMEs on investment planning and credit applications.
The event was attended by CEOs, CFOs and the top management of SMEs and mid-sized companies as well as financial intermediaries, financial advisors, academic institutions and industry associations.
The EIB has signed a €480 million loan agreement with LG Chem Wroclaw Energy, the Polish subsidiary of the LG Chem Group that was established to develop the group’s battery production facility in Europe. The financing will be used for the construction and operation of highly automated and innovative manufacturing facilities for advanced lithium-ion (li-ion) cells and batteries for battery-powered electric vehicles (BEVs). The EIB financing will cover around a third of the total project costs, estimated at €1.5 billion. The remainder will come from the company’s own resources and from other financing sources.
New initiative to strengthen innovation, competitiveness and entrepreneurship, Funding agreement signed in Athens by Hellenic Republic and European Investment Fund, Scheme to support new business investment over the next 4 years
The EIB is financing Mlekpol, one of Poland’s largest dairy cooperatives, to support the company’s modernisation and growth strategy. The €50 million loan (equivalent to PLN 212 million) will help finance a series of investments in Mlekpol’s Grajewo processing plant – one of 12 plants the company runs across Poland. The operation benefits from the guarantee of the European Fund for Strategic Investments, the financial pillar of the Investment Plan for Europe.