NIRAS to oversee €400M loan to strengthen Ukraine’s agri-food sector

Ukraine Cover 2

In a bid to boost productivity and competitiveness in the cereals, oilseeds and fisheries value chains, the EIB strengthens access to credit for mid-caps and SMEs

July 2, 2019
  • SDG: #17, #1, #8, #9
  • SECTORS: Development Consulting
  • COUNTRIES: Ukraine
  • DONOR: European Investment Bank
  • CLIENT: The Ministry of Finance, the Ministry of Agrarian Policy and Food, the State Export-Import Bank of Ukraine (JSC Ukreximbank)
  • CONTRACT VALUE: 5 395 000€
  • DURATION: 2019-2022

Ukraine is one of the most important producers and exporters of cereals and oilseed crops in the world and a country with abundant natural resources for fisheries and aquaculture. And yet, confronted with seasonal and unpredictable cashflows, for decades Ukrainian banks have looked on the agri-food sector as a high risk venture. This has resulted in steep interest rates and prohibitively high collateral requirements, which particularly impact small and medium-sized enterprises, effectively cutting off access to finance for long-term investments in mechanisation and technology upgrades to improve storage, processing capacity, and logistics infrastructure.

In the cereals, oilseeds, and fisheries/aquaculture value chains, such modernisations are needed to meet EU technical, sanitary, and phytosanitary standards and to be competitive both in and outside the Deep and Comprehensive Free Trade Area (DCFTA) that went into force at the end of 2017.

agricultural machinery
The loans will be made available to enterprises purchasing agricultural machinery, among others | Image © AFP 2015

Closely aligned with the EU-Ukraine Association Agreement, support for the technical assistance comes from two grants: one from the EU’s Neighbourhood Investment Facility, which supports partner countries in their efforts towards better governance and economic and social development, and the other from the EIB’s Eastern Partnership Technical Assistance Trust Fund, a multi-donor, multi-sector fund to enhance the quality and development impact of the EIB’s operations in Ukraine, Moldova, Armenia, Azerbaijan and Georgia. As a result, the technical assistance must focus not only on facilitating access to credit, but also on aligning investments and related agri-food practises and processes with EU standards.

To increase private-sector investment in the selected value chains, the European Investment Bank (EIB) and the Government of Ukraine jointly agreed the €400 million Ukraine Agri-food APEX Loan, which makes available very substantial resources for mid-caps and SME investments in an effort to increase their productivity and profitability. Ukraine will repay the loan as part of its sovereign debt.

Under a €5.5 million technical assistance grant from the EU and the UK, NIRAS and its consortium partners – AESA, TA Consult, and Unicon – were brought in to ensure timely, appropriate, and efficient distribution and use of loan funds.

Download the project brief to learn more about this programme.

Jane Bech Larsen

Jane Bech Larsen

Business Development Director Economic Development

København, Denmark

+45 6039 4431

See more solutions within the same sectors