- EBRD guarantees €6.3 million of €10.5 million of lending to support food security in Ukraine
- Unfunded risk-sharing agreement for agribusiness company Astarta is with Raiffeisen Bank
- Support is part of €1 billion EBRD activity in Ukraine this year, with donors and partners
The EBRD is boosting food security in wartime Ukraine by backing more than half the risk of a revolving working capital loan for UAH 330 million (€10.5 million equivalent) to Astarta Group, one of the country’s major agricultural and food processing businesses, through an agreement with Raiffeisen Bank (RB). The share of the risk the EBRD takes on comes to €6.3 million.
The EBRD’s risk-sharing instruments enhance local financiers’ capacity to provide access to finance for Ukrainian private companies operating in critical agri-related industries, whether farming or food processing, transport and imports. Russia’s full-scale invasion of Ukraine, which began on 24 February, came just ahead of the spring sowing season in this major agricultural economy, which supplies farming produce around the world.
This loan will help Astarta secure sufficient financing for successful crop farming season in times of war in Ukraine. The project is part of the EBRD’s Food Security Ukraine package, within the Resilience and Livelihoods Framework adopted by the Bank to support the country’s economy after Russia invaded on 24 February.
With donors and partners, the EBRD has pledged to invest €1 billion this year in supporting the Ukrainian economy.
The war on Ukraine raises the spectre of worsening food security globally, because Ukraine is a significant food exporter. Ukraine exports account for about 10 per cent of the globally traded wheat and corn and 37 per cent of sunflower oil [according to UN FAO figures.]
The EBRD was swift to condemn the Russian invasion of Ukraine on 24 February and pledged to stand by Ukraine. In early April, the EBRD’s Board of Governors voted to suspend open-endedly the access of Russia and Belarus to EBRD finance and expertise, and the Bank has closed its offices in Russia and Belarus.
In addition to a resilience package for Ukraine and neighbouring countries affected by the war, the EBRD has pledged to help finance Ukraine’s reconstruction once conditions permit.
By Vanora Bennett