Under the terms of the agreement, the loan will be supported by EBRD’s risk sharing facility (RSF) programme

EBRD

Image: Krolevets Feed Factory in Ukraine. Photo: courtesy of European Bank for Reconstruction and Development (EBRD).

The European Bank for Reconstruction and Development (EBRD) and Raiffeisen Bank Aval (RBA) have agreed to provide up to $8.5m in loan to Krolevets Feed Factory (KFF) in Ukraine.

EBRD claims that the funds will improve the efficiency of the agribusiness sector in Ukraine.

The loan will be used by KFF to acquire over 100 grain hoppers, 13 new trucks with trailers and specialised equipment to develop its operational efficiency and expand its logistics operations.

The financial assistance will also help in the upgrade of the existing fleet of vehicles used for crop transportation.

Under the terms of the agreement, the loan will be supported by EBRD’s risk sharing facility (RSF) programme, which was signed by the two financial organisations.

EBRD said that it will share the risk on individual loans made by the Ukrainian bank to businesses in a combined amount of up to €20m ($22.05m) over a period of three years. The RSF will help increase the size and tenor of loans to businesses across the country.

EBRD has made a cumulative commitment of nearly $16.10bn in Ukraine

The EBRD claims to be the largest international financial investor in Ukraine. The bank has committed approximately €14.6bn ($16.10bn) through 445 projects since the start of its operations in the country in 1993.

In September, the EBRD had agreed to provide $35m (£28m) in loan to Dutch processor of agricultural goods Louis Dreyfus Company (LDC), for its Ukrainian subsidiary.

The loan from EBRD will be used by a railcar logistics business in Ukraine. The funding will help the company acquire up to 1,000 grain-hopper railcars which could significantly improve grain-handling logistics for the company.

EBRD said that the new railcars can reduce the volume of grain transported by trucks and can in turn help in lowering CO2 emissions by up to 8,510 tonnes annually.

Founded in 1992, Raiffeisen Bank Aval has been part of the Austrian banking group Raiffeisen Bank International AG since October 2005.

The Ukrainian commercial bank offers a wide range of services to over 2.5 million clients through its nationwide network.