The European Bank for Reconstruction and Development (EBRD) is providing a $30 million financial package to Astarta, one of the country’s largest sugar producers, to cope with the adverse conditions caused by Russia’s war against Ukraine and ensure more sustainable operations.
According to the agroholding’s announcement on the Warsaw Stock Exchange website Friday, the package consists of a $21 million loan from the EBRD and $9 million from the Clean Technology Fund (CTF) aimed at sustainable development. Technical cooperation support for the legal review of the operation will be provided by the Technical Cooperation Fund of Japan and the EBRD.
“Funding for the holding company’s investment plan will help Astarte continue to develop agriculture, soybean processing and sugar production amid the instability associated with the war. The liquidity support provided through this loan will help support operations and maintain the production and export volumes needed for food security, while supporting Astarta’s nearly 7,000 employees along with employees of supply chain partners,” the statement noted.
According to the agri-holding, the financing will be used to modernize and improve the energy efficiency of existing production facilities, implement climate-smart agricultural practices to improve business sustainability, reduce production and energy costs while improving productivity and operational efficiency. The funds raised will also be used as working capital to support the agricultural holding’s operations at pre-war levels.
This is the first transaction in Ukraine supported by the EBRD’s High Impact Climate Program for the corporate sector financed by the Clean Technology Fund. The loan is characterized by an innovative blended finance structure where the price is linked to achieving climate change goals, Astarta noted.
As reported, the EBRD, which accelerated lending to Ukraine after the Russian invasion in February 2022, pledged to invest €3 billion in the country between 2022 and 2023. Food security is one of the five priority investment areas, along with energy security, vital infrastructure, trade finance and private sector support.
“Astarta is a vertically integrated agro-industrial holding operating in eight regions of Ukraine. It consists of six sugar factories, farms with land bank of 220 thousand hectares and dairy farms with 22 thousand cattle, oil extraction plant in Globino (Poltava region), seven elevators and biogas complex.
Agroindustrial holding Astarta, the largest sugar producer in Ukraine, received EUR65.16 mln of net profit in 2022, which is 46.8% less compared with 2021. The company’s EBITDA decreased by 23.2% to EUR154.77 mln last year, while revenues increased by 3.8% to EUR510.07 mln.
The European Bank for Reconstruction and Development (EBRD) is lending EUR10.6 million to the municipal enterprise (CE) Electrotrans (Khmelnitsky) to finance the purchase of new trolleybuses, as well as equipment for maintenance and diagnostics, according to a press release from the bank.
The EBRD loan is part of a financing package that also includes investment grants from the EU Neighbourhood Investment Platform of up to EUR2.75 million and up to EUR1.7 million from the EBRD’s Special Crisis Response Fund, which receives a contribution from the U.S. government, according to the statement Friday.
The loan and grants will be used to purchase new trolleybuses with remote monitoring systems, spare parts and service equipment.
In turn, the city will cover the cost of installing surveillance cameras inside the trolleybuses and upgrading the trolleybus stops, traction substations and trolleybus depot in the amount of EUR1.5 million.
The press release reminds us that the project is part of the EBRD’s Green Cities program, which Khmelnitsky joined in 2019. The first project, signed in October 2020, concerned improving solid waste management.
“Both projects are extremely important to the residents of Khmelnitsky: the ongoing project – to improve solid waste management – and the project to purchase new trolleybuses. We are glad that we can implement them exactly with the EBRD, our long-term partner, despite the war caused by Russian aggression,” the press service quotes Khmelnitsky Mayor Alexander Simchyshyn, who represented the city in Warsaw at the signing of the agreement with EBRD Managing Director for Sustainable Infrastructure Development Nandita Parshad.
As reported, earlier Simchyshyn noted that up to 45 low-floor trolleybuses are planned to buy with EBRD funds and grants, but at the same time, their number will depend on the cost of trolleybuses, which has increased.
The EBRD press service states that after the full-scale invasion of Ukraine by Russia, Khmelnytskyi faced a large flow of internally displaced persons (IDPs), which put a strain on city services.
The EBRD resumed work with Khmelnitsky in June, adding an IDP needs assessment to the Green City Action Plan, with funding provided by the Swedish government.
The EBRD’s Green Cities program was founded in 2016. Since then, it has helped more than 50 cities on three continents, with more than EUR5 billion spent on its support.
In Ukraine, Lviv, Kiev, Kryvyi Rig, Dnipro, Khmelnitsky joined it, among others.
As it was reported, the EBRD together with donors undertook to provide financing in the amount of EUR3 billion for support of functioning of business and economy in Ukraine in 2022-2023. In 2022, the bank allocated EUR1.7bn to support Ukraine and attracted EUR200m from partner financial institutions.
European Bank for Reconstruction and Development (EBRD) will issue long-term loan of EUR42 mln to support activities of Polish ceramic tile and sanitary ware producer Cersanit S.A. in Ukraine and Poland.
According to an EBRD press release on Tuesday, the financing will be used to offset the impact of the write-down of Russian assets, the war in Ukraine and a fire at one of Cersanit’s facilities in Poland. In addition, the manufacturer is expected to play an important role in rebuilding Ukraine’s infrastructure damaged by the Russian invasion.
According to the report, the development project includes ramping up production of ceramic tiles and sanitary ware and completing investments in large format tile production in Ukraine, as well as renovating the acrylic products plant in Poland, expanding capacity and improving energy efficiency of the plants. The total amount of the project is EUR120 million.
“These investments not only help the economies of both countries by supporting a dynamic local producer of goods that will be an important component of Ukraine’s recovery, but also retain human capital by preserving key jobs. The EBRD remains committed to financing other investments in Ukraine and neighboring states affected by the war,” EBRD Vice President Alain Piloux was quoted as saying in a statement as signing the loan agreement with Cersanit in Warsaw.
The loan is part of the Resilience and Livelihoods Facility (RLF) program opened by the bank after the war.
As it was reported, the EBRD together with donors undertook to provide financing in the amount of EUR3 billion to Ukraine during 2022-2023 to support the functioning of business and economy. In 2022, the bank allocated EUR1.7 billion to support Ukraine and attracted EUR200 million from partner financial institutions.
Cersanit S.A. is one of the leading manufacturing companies with Polish capital on the European market. The main activity of the company is production and sale of products for finishing and equipping bathrooms.
As stated on the Cersanit website, the group has four plants in Poland and one in Germany, Romania and Ukraine. The company’s Ukrainian plant was launched in 2009 in Zhytomyr region. The capacity of the company is 12 million square meters of ceramic tiles and up to 2 million units of sanitary ware a year.
According to the financial statements of Cersanit Invest LLC, in 2022 the company received a net loss of 964.5 million UAH, while the revenue amounted to more than 2.1 billion UAH.
According to Opendatabot, the owner of the company is listed as Cersanit JSC, the beneficiary is Michal Andrzej Solowow (Poland).
The European Bank for Reconstruction and Development (EBRD) may grant Ukrzaliznytsia (UZ) a EUR200mn emergency support loan under sovereign guarantees.
As stated in a statement on the bank’s website on Tuesday, the bank’s board of directors plans to consider the project at a meeting on May 10, 2023.
According to the information, the loan consists of EUR100 mln of emergency financing of UZ capital investments and EUR100 mln of capital structure support.
It is expected that 50% of the loan will be secured by guarantees of G7/EU donors involved in the conditions when local commercial structures cannot guarantee risk covering mechanisms.
It is noted that with the help of the loan, UZ will be able to increase cross-border capacity with the EU by removing bottlenecks in border crossing, as well as to repair the relevant sections of the railroad bed that were damaged due to the full-scale invasion of Russia. With the funding, UZ will not only be able to renew key rail corridors at the border with the EU, but also to purchase rolling stock to provide comprehensive solutions for expanding the capacity of rail corridors with the EU.
“The project will support the company in the current critical issues that need to be addressed to improve operations and connectivity with the EU, continuing to provide a vital service to people and businesses in need of reliable logistics for key Ukrainian exports (including agricultural products) and critical imports,” the project description on the EBRD website said.
Earlier, Fitch Ratings reported that amid negative operating cash flow expectations for UZ in 2023, the company needs financing which could amount to EUR400m, including EUR199m from existing credit lines with the EBRD and EIB and $200m in the pipeline.
At the end of 2022, UZ’s outstanding debt amounted to 39.5 billion UAH, compared to 33.5 billion UAH in 2021, of which Eurobonds accounted for 82.8% and debt in foreign currency – 94.3%.
At the end of January, UZ signed an agreement with the holders of two issues of Eurobonds worth $895 mln on the deferral of coupon payments and repayment for 24 months. Under the agreements, the new maturity date for the $ 594.9mn 8.25% Eurobond is July 9, 2026, and for the $300mn 7.87% Eurobond – July 15, 2028.
As a result of the bond restructuring, the company received a deferral between 2023 and 2025: only 4% of the total debt is due during that period. The main payments are now due in 2026 – 58% of the current total debt (mostly $595mn Eurobonds) and after 2027 – 32% (mostly $300mn Eurobonds in 2028).
European Bank for Reconstruction and Development (EBRD) First Vice President Jurgen Rigterink led the bank’s high-level delegation to western Ukraine to discuss in Lviv further strengthening the bank’s commitments to Ukraine as the country enters its second year of war, the EBRD press service reported.
With the participation of EBRD Managing Director for Eastern Europe and the Caucasus Matteo Patrone and the bank’s Deputy Head of Industry, Trade and Agribusiness in Ukraine Lesya Kuzmenko, Rigterink discussed future investments with Lviv Mayor Andriy Sadovy.
According to the press release, Lviv and western regions of Ukraine are near the border with several European Union countries. As the war challenges Ukraine’s ability to import and export through its Black Sea ports, road and rail connections to the west of Lviv become crucial to support the economy. The area is also seen as a likely starting point for future reconstruction efforts.
That said, as the largest population center in the west, Lviv has received a significant number of internally displaced people, putting pressure on key municipal services at a time when the city needs to generate revenue. In December 2022, the EBRD provided EUR25 million to Lviv and its municipal enterprises, and U.S. credit support covered half of that loan to provide liquidity for adaptation.
EBRD representatives reportedly visited the city’s hospital and the Nezlamni rehabilitation ecosystem being built in Lviv, where war wounded warriors have access to multidisciplinary teams of surgeons, trauma surgeons, prosthetists, psychotherapists and rehabilitation specialists.
The delegation also visited several EBRD projects in Lviv and the region and discussed existing and potential projects with clients. In particular, among them is the Bank Lviv, which received a syndicated loan of EUR 10 million in August 2022 for lending to small and medium-sized enterprises.
In addition, representatives of the EBRD got acquainted with the implementation of the project “Lviv Industrial Park M10”, located 60 km from the Polish border. Its first phase = construction of a warehouse complex of 14,400 square meters is nearing completion. In December 2022 the EBRD undertook to invest up to $24,5 mln to acquire a 35% share in the project.
According to the bank’s press service, other meetings included visits to new production facilities recently created with the EBRD’s support by yeast producer Enzyme, communication with representatives of pet food producer Kormotech, gas station operator Galneftegas (GNG), ventilation system producer Prana and IT company Softserve.
In Lviv EBRD representatives also visited the Superhumans rehabilitation center – a humanitarian project of the bank’s client, owner of one of Ukraine’s largest container terminals TLC Andriy Stavnitser. The center provides prosthetic limbs for adults and children.
The delegation toured the small company, a car wash that was destroyed by rocket fire last April, but resumed and returned to work within a month.
As reported, the EBRD allocated a record EUR1.7 billion to Ukraine in 2022, while attracting additional co-financing from partner banks and international grants and guarantees from donors and shareholders.
The EBRD, Ukraine’s largest institutional investor, has committed to invest EUR3 billion during 2022-2023 and is ready to play a leading role in financing the country’s reconstruction when conditions permit.
The press release stresses that since the start of the war, the EBRD has moved quickly from condemning the Russian invasion to preparing an immediate financial response. This assistance is aimed at ensuring the sustainability of Ukraine and the refugee host countries in preparation for the country’s future reconstruction.
The European Bank for Reconstruction and Development (EBRD) and Multilateral Investment Guarantee Agency (MIGA) signed the first co-financing agreement in their history, under which MIGA provides guarantees for up to $200 million of trade finance risks to EBRD under its Trade Facilitation Program (TFP).
“The first country to benefit from this agreement will be Ukraine…The guarantee will cover EBRD trade finance in selected state banks, primarily in Ukraine,” the bank said in a press release Tuesday.
According to it, the MIGA guarantee was signed by the agency’s executive vice president, Hiroshi Matano, during a visit to EBRD President Odile Reno-Basso.
The EBRD recalled that it had sent EUR1.7 billion to Ukraine in 2022 and promised to increase this amount to at least EUR3 billion by the end of 2023, and had established an international partnership to help Ukraine and its financing with shareholders and donors.
“The MIGA and EBRD partnership will facilitate needed trade finance in Ukraine and other countries supported by MIGA and EBRD at a time of growing economic pressures and heightened geopolitical risks affecting trade, supply chains and critical imports,” Matano said in the release.
“This guarantee will be important in helping us expand our trade finance business in Ukraine, which is one of our strategic priorities in working in the country,” Reno-Basso said in turn.
The EBRD pointed out that since the outbreak of the war in Ukraine in February 2022, trade flows and supply chains in Ukraine have been seriously disrupted. In particular, the agricultural sector, which accounts for 11 percent of the country’s GDP, nearly 20 percent of the labor force, and nearly 40 percent of all exports, has been affected.
In addition to the physical disruption of transportation routes, financial intermediation has been a significant problem, as foreign commercial banks have stopped taking any direct risk on trade finance transactions in Ukraine. To address this problem, the EBRD’s TFP Program significantly increased the provision for Ukrainian banks to cover some of the increased demand.
Since February 2022, TFP has supported more than EUR400 million in trade transactions involving critical commodities for the Ukrainian economy. TFP also supports the entire supply chain to address food security issues: facilitating imports of seeds, fertilizers, fuel, tractors and combines into Ukraine, as well as exports of grain, oilseeds and vegetable oils to other EBRD countries of operations, including Egypt, Morocco, Turkey and Tunisia.
The EBRD has developed its Trade Facilitation Program to promote and facilitate international trade with and within Central and Eastern Europe, the CIS and Southern and Eastern Mediterranean countries (SEMED). TFP provides guarantees to international commercial banks to cover political and commercial payment risk on transactions made by issuing banks in the EBRD’s countries of operations.
More than 100 issuing banks in 26 countries participate in the program, working with more than 800 confirming banks and their subsidiaries worldwide.
Since the program’s launch in 1999, TFP has supported over 30,000 trade finance transactions totaling over EUR30 billion, including 3,000 foreign trade transactions of Ukraine totaling over EUR4 billion.
