The European Bank for Reconstruction and Development (EBRD) is mulling a project to provide a debt funding of EUR 51.9 million to PJSC Ukrgazvydobuvannia to finance the procurement of workover rigs and a package of energy efficiency investments.
According to a report on the bank’s website, the Board of Directors will discuss the project on December 12, 2018.
According to the document, the loan will benefit from a sovereign guarantee by Ukraine.
Ukrgazvydobuvannia, fully owned by Naftogaz Ukrainy, is the country’s largest gas producer, which provides about 75% of the total gas production in the country.
As reported, the EBRD recently defined operational and strategic priorities in Ukraine for the next five years: privatization and improved governance in the public sector, energy security and energy efficiency.
The EBRD is the largest international financial investor in Ukraine. To date, the bank has made a cumulative commitment of almost EUR 12.1 billion across some 400 projects since the start of its operations in the country in 1993.
The European Bank for Reconstruction and Development (EBRD) has defined operational and strategic priorities in Ukraine for the next five years: privatization and improved governance in the public sector, energy security and energy efficiency, as well as strengthening the banking sector and developing capital markets. “The EBRD will pay special attention to projects that will integrate investment and policy engagement in areas such as privatization, energy security and efficiency, the financial sector, trade and infrastructure,” the bank said in a statement in connection with the adoption of a new strategy for Ukraine.
“The EBRD will help stimulate private sector participation across sectors and further commercialization of public sector firms. The bank will continue to support the implementation of modern public sector procurement as well as the introduction of proper public governance,” a bank press release reads.
“The EBRD’s operational and strategic priorities in Ukraine will rest on the following five pillars: promoting privatization and commercialization in the public sector to increase competitiveness and good governance; promoting the rule of law, fair competition in the private sector and support of companies that use best practice; strengthening energy security through effective regulation, market liberalization, diversified and increased production and energy efficiency; enhancing the resilience of the financial system by strengthening Ukraine’s banking sector, and by developing capital markets and non-bank finance; and improving integration by facilitating trade and investment, expanding infrastructure links, and supporting convergence with EU standards,” the document states.
“The EBRD will foster competition and support anti-corruption efforts. Special attention will be paid to improved skills and to the employability of disadvantaged groups. The bank will pledge more resources to create a market structure for sustainable energy and improved energy connectivity. It will assist in the creation of increased resource efficiency and will help promote renewable energy,” it says.
“The EBRD will promote a stable and efficient banking sector, a greater variety of non-banking financial channels and the use thereof. The bank will invest in improvements to connectivity through better infrastructure. It will also help facilitate increased trade and investment flows,” the bank added.
The European Bank for Reconstruction and Development (EBRD) is considering a project for the issue of a EUR35 million multi-currency loan to France’s Soufflet Group for the work of its subsidiaries in Ukraine, Poland, Romania, Bulgaria, Kazakhstan, and Serbia. According to the bank, the board of its directors plans to discuss this project at a meeting on October 3 this year.
It is assumed that the funds will be used to replenish working capital necessary for the subsidiaries to work in the agro-market of these countries: from storage and processing into malt to trade in agricultural products.
Among the customers are Soufflet Agro Ukraine and Soufflet Agro Polska, which are 100% subsidiaries of Soufflet Group.
In the first half of 2018, Soufflet Agro Ukraine LLC saw revenue rise by 60.3%, to UAH 2.707 billion, while net profit fall by 2.8%, to UAH 109.93 million.
Last year the company more than doubled revenue, to UAH 3.835 billion, posting a net loss of UAH 23.23 million against UAH 31.49 million net profit a year earlier.
As a result of the next wave of privatization, investors who are ready to invest in their development of Ukrainian companies should become their new owners, EBRD Managing Director for Eastern Europe and the Caucasus Francis Malige is convinced.
Our task is to organize privatization in such a way that a real investor who will invest money will come, we need to prepare this process, he told Interfax-Ukraine.
On the one hand, it is unacceptable that sometimes this process takes so much time, but on the other hand – I would not want to see that the new owners of the companies have nothing to do with them, investors should be real, Malige noted.
As reported, in early 2018 the working group on privatization was updated. It included representatives of the Reforms Delivery Office under the Cabinet of Ministers of Ukraine, SAGSUR, the World Bank, the EBRD, the International Monetary Fund, the USAID, and the EU Delegation to Ukraine.
The working group was renewed to effectively coordinate the authorities, prepare recommendations and proposals for the draft resolutions of the Cabinet of Ministers on privatization and conditions of the sale of public property, attract international financial and technical assistance to prepare for privatization and put up the objects for sale and analyze the main problems of ensuring transparent and competitive privatization.
EBRD, FINANCE DEVELOPMENT, INVESTORS, OWNERS, PRIVATIZATION, UKRAINIAN ENTERPRISES
The European Bank for Reconstruction and Development (EBRD) has lent a $20 million loan to Zerno-Agrotrade LLC and Tsukoragroprom LLC, owned by the Astarta agro-industrial holding, for replenishment of their working capital.
“Astarta will introduce advanced IT solutions necessary for precise farming that it develops in Ukraine. These modern agricultural technologies will allow boosting the yield of agricultural crops and reducing the use of mineral fertilizers by 15%,” EBRD Senior Adviser for External Relations Anton Usov wrote on Facebook.
In the next three years, Astarta also plans to increase the area of land on which it will use the technology of precision farming.
“In the context of this project, Astarta will also offer a high-quality integrated training program for graduates of schools and students of universities who want to work in the agricultural sector of Ukraine,” Usov noted.
Astarta is a vertically integrated agro-industrial holding operating in Poltava, Vinnytsia, Khmelnytsky, Ternopil, Zhytomyr, Chernihiv, Cherkasy, and Kharkiv regions. It consists of eight sugar refineries, agricultural enterprises with a land bank of about 250,000 hectares, a soybean processing facility, dairy farms and a complex that produce energy from agricultural residues.
The European Bank for Reconstruction and Development (EBRD) will consider a loan worth up to EUR 150 million for LLC SyvashEnergoProm, a subsidiary of Norway’s NBT, for the construction of a 250 MW wind farm in Kherson region, the lender said on its website. “This is a long-term senior loan of up to EUR 150 million in an A/B structure, of which up to EUR 75 million would be funded from the EBRD resources and the remainder would be syndicated in a B-loan structure to eligible institutions. The remaining project financing is expected to be provided via parallel loans from IFIs, DFIs, and other investors,” the Bank said.
The total cost of the project is EUR 369 million.
The project will help support the development of renewable energy in Ukraine and the overall decarbonisation of the energy sector. As was reported, NBT SA, which is a Norwegian wind farm developer with operating wind farms in China, in April 2018 bought LLC SyvashEnergoProm (operates a wind farm whose capacity is about 3 MW). It plans to build a wind farm with a capacity of 250-330 MW in neighboring areas.
