The European Bank for Reconstruction and Development (EBRD) will provide up to $20 million in working capital to two subsidiaries of Ukraine’s Industrial Milk Company (IMC) – a Warsaw-listed agribusiness involved in crop farming, 554,000 tons of grain and oilseed storage, potato production and dairy farming.
The fresh capital will be used to fund both pre and post-harvest working needs of the operation as the group aims to double its cultivated soybean land to 15,000 hectares in the coming years.
“We believe that this crop suits planting in the northern part of the country,” IMC Director General, Alex Lissitsa said at the loan agreement signing ceremony, reports Interfax-Ukraine.
Under the terms of the financing agreement, IMC will be the first company in Ukraine to partake in the Resource Efficiency and Climate Change Adaptation Assessment commissioned by the EBRD – a program aimed at increasing resource efficiency, reducing a company’s environmental footprint, reducing costs and boosting the overall growth and efficiency of an agricultural business.
“For us, the beginning of cooperation with the powerful international financial institution as the EBRD is very important,” said Alex Lissitsa, CEO of IMC according to 4-Traders. “It is not only one of the few opportunities today to get a loan in a difficult economic and political situation in Ukraine, but also the opportunity to join the global initiatives and projects from the EBRD.”
Based on the outcome of the assessment, representatives from IMC working together with their counterparts from the EBRD have developed an action plan outlining best practices in response to climate change which will be implemented between 2016 and 2017. Additionally, Interfax-Ukraine reports that teachers from four agrarian educational institutions in Poltava, Sumy, Kyiv, and Vinnytsia, will be trained as part of the project under contracts signed between IMC and the institutions.
Since expanding its presence into Ukraine, World Grain reports that the EBRD has made total cumulative commitments of €12 billion over 364 projects in the country as of the end of June. Other funding deployed in the country to date has included a trade facility of up to €10 million to Credit Agricole Ukraine announced in March, a $20 million revolving working capital facility to Urkrainian Agrarian Investments, a 70-farm agribusiness announced in January, a $5 million loan to diversified agricultural producer, LLC V.V. Kischenzi, an $85 million loan to agricultural producer, PJSC Myronivsky Hliboproduct, and a $65 million working capacity facility to Kernel Group, one of the most prominent agribusinesses in the country.
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Lynda Kiernan