EBRD Provides USD25 mn Loan to Mriya Agro Holding
OREANDA-NEWS. February 01, 2011. The EBRD is providing a working capital facility worth USD 25 million to M-Trade LLC, a subsidiary of Mriya Agro Holding Public Limited involved in farming business and logistic services in Ukraine. The project will provide financing of inputs needed for agricultural production as well as crops stored at certified warehouses, reported the press-centre of EBRD.
Mriya is a major agribusiness company listed on Frankfurt Stock Exchange, which carries out agricultural activities on 220,000 hectares of land spread across Ternopil, Khmelnytskiy, Chernivtsi and Ivano-Frankivsk regions of western Ukraine, and is one of the most successful agro-producers in the country. EBRD financing will support sustainable growth of Mriya Agro Holding operations, facilitate market expansion and competition by bringing new land into production and increasing the crop yields and promote Warehouse Receipts as a pledge instrument.
Many primary agricultural producers experience problems with the availability of even simple working capital financing. The main reason for this is the lack of credible security. To tackle this issue, the EBRD and the IFC are launching a new initiative to develop Crop Receipts, which will allow farmers to use the crop in the ground as security and which is based on legislation successfully used in Brazil. This instrument, if implemented, should enable more lending to primary agriculture, a sub-sector which currently receives extremely limited debt financing.
Gilles Mettetal, EBRD Director for Agribusiness, said: “We feel it is very important to support strong local companies and promote lending against pledges of agricultural commodities and warehouse receipts. The EBRD once again shows its long-term commitment to provide a more reliable and efficient grain storage and grain financing system in this country. Projects like this contribute to Ukraine’s position of a strong agricultural commodity exporter”.
Mykola Huta, the CEO of Mriya Agro Holding, said: “EBRD’s funding is important for us to be able to grow our business, improve the efficiency of our operations, and contribute to the development of Ukraine’s agricultural sector”.
The European Bank for Reconstruction and Development is the largest financial investor in Ukraine. As of 31 December 2011, it had committed over EUR 6 billion through 264 projects. In the agribusiness sector alone, the EBRD has directly committed more than EUR 6 billion in over 400 projects across central and eastern Europe and the Commonwealth of Independent States since 1991. The EBRD, owned by 61 countries and two intergovernmental institutions, is supporting the development of market economies and democracies in countries from central Europe to central Asia.
Mriya was founded in 1992 as a small farm with around 50 hectares of land. The company is now Ukraine’s seventh-largest primary agricultural producer with a proven track record of growing wheat, barley, sugar beet, rapeseed, potatoes, and other crops. Mriya carries out agricultural activities on 220,000 hectares of land spread across Ternopil, Khmelnytskiy, Chernivtsi and Ivano-Frankivsk regions of western Ukraine. The company is listed on Frankfurt Stock Exchange.