Business news from Ukraine

EBRD TO PROVIDE EUR 10 MLN LOAN TO KYIVSKY CARDBOARD MILL

The European Bank for Reconstruction and Development (EBRD) will provide a loan of EUR10 million to Kyivsky cardboard and paper mill (KCPM), a leading company in the sector and based outside Ukraine’s capital. This will be a seven-year loan to boost energy efficiency and reduce CO2 emissions, the EBRD said in a statement on July 13. The purchase of a shoe press for cardboard drying will help KCPM reduce the use of steam, increase production volumes and improve the quality of coated cardboard. The replacement of pumps will halve the electricity needs of this equipment. Combined annual savings are expected to reach up to EUR2 million.
New converting and packing lines for the production of tissues will be procured as part of the project and will allow the company to widen its range of products for use in office buildings, hotels, schools and airports. It will also help KCPM increase its domestic and export sales, including those to the EU.
KCPM will upgrade its waste-paper processing equipment, which will allow the firm to improve the quality – and reduce the cost of cardboard production. These improvements will make it possible to reprocess waste paper up to four times. This will be the first production cycle in the country to implement the EU principles of using fewer resources and increasing energy efficiency.
The investments are expected to reduce the company’s annual CO2e emissions by up to 11,000 tonnes. Kyivsky cardboard paper mill is one of the largest cardboard and paper producers in Europe. It employs almost 2,200 people. It sells produce to almost 700 companies in Ukraine, some CIS member states and the rest of the world. In 2017, the mill saw a 14.8% rise in production from 2016, to UAH 4.85 billion. The mill is owned by Pulp Mill Holding GmbH (Austria), its ultimate beneficiary is businessman Volodymyr Krupchak.
The EBRD is the largest international financial investor in Ukraine. Since the start of its operations in the country in 1993, the Bank has made a cumulative commitment of almost EUR 12.1 billion across some 400 projects in Ukraine.

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NIBULON GETS $80 MLN LOAN FROM CONSORTIUM OF BANKS

ING Bank N.V. (ING), as a mandated lead arranger and bookrunner, a syndicate of European commercial banks, and the European Bank for Reconstruction and Development (EBRD) have signed an agreement on providing a $80 million syndicated term loan for Mykolaiv-based Nibulon. The assets will be used to finance the company’s working capital needs associated with purchase of commodities in Ukraine and exports to the global market, according to a reports on the company’s website.
The loan tenor is three years.
Nibulon was established in 1991. It is one of the largest operators in the grain market of the country. It has elevators with a total capacity of about 2 million tonnes, as well as its own transshipment terminal with a capacity of 5 million tonnes in Mykolaiv. The company has 11 river terminals on the Dnipro and the Southern Buh, its fleet consists of 67 vessels. Nibulon cultivates 83,000 hectares of farmland. It exports farm produce more than 60 countries. The annual volume of exports exceeds 4.5 million tonnes.

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EUROPEAN INVESTMENT BANK TO GRANT UKRAINE EUR 75 MLN LOAN FOR ROAD SAFETY

Ukraine and the European Investment Bank (EIB) on the margins of the Ukraine-EU summit in Brussels on Monday signed an agreement on the allocation of a EUR 75 million loan for the implementation of the project on improving road safety in Ukrainian cities. “The EIB allocates EUR 75 million, which will be received by five largest cities in Ukraine – Dnipro, Kyiv, Lviv, Odesa and Kharkiv,” the press service of Ukraine’s Deputy Prime Minister for European and Euro-Atlantic Integration Ivanna Klympush-Tsintsadze reported.
The EIB said in a press release due to the signing of the agreement that in addition to the loan, an EU grant of EUR 4.25 million will be provided as part of the so-called Neighborhood Investment Facility (NIF), allocated for the preparation of the project, development and monitoring.
The executor of the project is the Ukrainian Infrastructure Ministry, and the recipients of financial assistance from the EIB are the authorities of these cities. Investment will be directed to eliminate the most dangerous sections by creating better interchanges and modern transport systems, as well as improving intersections and updating the road infrastructure, the bank said.
According to the bank, other changes planned within the project will include the development of a network of safe bike and pedestrian paths, urban transport planning system, introduction of speed limits in residential areas and school areas, and the introduction of an IT-based traffic management system.

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GERMAN DEVELOPMENT BANK TO ISSUE $17 MLN LOAN TO OTP

The German Development Bank (KfW) will provide OTP Leasing (Kyiv) with a subordinated loan of $17 million under the Agrofinancing program.
According to a press release of KfW, the corresponding loan agreement was signed by the parties on June 19.
The loan is granted for seven years with payment at the end of the term.
“To date, KfW has cooperated with banks in the Ukrainian financial sector, but leasing is a good alternative for financing investments, especially for small and medium-sized enterprises in agricultural sector. Therefore we are very pleased with our new partner, OTP Leasing, and, providing it with a subordinated loan, we are implementing a new financial instrument in Ukrainian leasing,” KfW Director in Ukraine Lutz Horn-Haacke said.
According to the report, the loan attracted by OTP Leasing will allow to provide Ukrainian companies with $180 million financing this year instead of the planned $100 million.
OTP Leasing is part of the European financial group OTP Group. The company was founded in June 2008 as a subsidiary of OTP Bank. It provides a full range of leasing services, works with the leading manufacturers of machinery, equipment and vehicles.

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OPIC APPROVES $250 MLN LOAN FOR NAFTOGAZ

The Overseas Private Investment Corporation (OPIC) on June 14 approved $250 million in political risk insurance for national joint-stock company Naftogaz Ukrainy covering its revolving gas purchase facility. OPIC said on its website that this will help Naftogaz build up gas reserves during the summer months to maintain a reliable supply and affordable prices. Earlier OPIC said that it is planned that the relevant loans, the total amount of which can reach $270 million, will be attracted by Naftogaz from Goldman Sachs International and other international financial institutions.
OPIC said the implementation of the project will allow Naftogaz to purchase gas in the amount of up to 4% of the annual consumption of Ukraine at an attractive price for its subsequent sale in the autumn-winter period.
Naftogaz Ukrainy unites the largest oil and gas producing enterprises of the country. The holding is a monopolist in transit and storage of natural gas in underground storage facilities, as well as oil transportation via pipelines throughout the country.

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EBRD COULD PROVIDE $20 MLN LOAN TO ASTARTA

The European Bank for Reconstruction and Development (EBRD) could provide a senior secured long-term loan of up to $20 million to finance working capital of Astarta agricultural holding. According to a report on the bank’s website, the decision could be made on June 18.
The project will support the company in development and implementation of cooperation with local universities and schools, contributing to improved access to training and employment opportunities for young people.
In addition, the project is expected to contribute to significant efficiency and productivity gains through introduction of modern IT solutions and farming techniques as well as to support development of stronger backward linkages to local suppliers.
The total cost of the project is $242 million.
As reported, the EBRD in October 2017 provided a $25 million loan for seven years to build and buy sugar and grain storage facilities.
Astarta is a vertically integrated agro-industrial holding operating in Poltava, Vinnytsia, Khmelnytsky, Ternopil, Zhytomyr, Chernihiv, Cherkasy and Kharkiv regions.

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