EBRD guarantees 60% of Astarta's $8 mln loan to UkrSibbank to support food security in Ukraine

KYIV. Aug 26 (Interfax-Ukraine) – The European Bank for Reconstruction and Development (EBRD) will assume guarantees for 60% (or $4.8 million) of a $8 million loan of Astarta agro-industrial holding to Ukrainian UkrSibbank, this loan will help the holding increase working capital for successful cultivation of crops and sugar production.

In general, the EBRD intends to provide support to Ukraine in 2022 in the face of Russian aggression for a total of EUR 1 billion, according to the website of the financial institution on Friday.

"As part of its efforts to boost food security in wartime Ukraine, the EBRD is backing more than half the risk of a $8 million loan to Astarta Group, one of the country’s major agricultural and food processing businesses, through an agreement with partner bank UkrSibbank BNP Paribas Group. The EBRD’s share of the risk for the multicurrency working capital loan comes to $4.8 million," the bank said.

"The EBRD’s risk-sharing instruments enhance local financiers’ capacity to provide access to finance for Ukrainian private companies operating in critical agri-related industries, whether farming or food processing, transport and imports. Russia’s full-scale invasion of Ukraine, which began on 24 February, came just ahead of the spring sowing season in this major agricultural economy, which supplies farming produce around the world," it said.

The EBRD was swift to condemn the Russian invasion of Ukraine on 24 February and pledged to stand by Ukraine. In early April, the EBRD’s Board of Governors voted to suspend open-endedly the access of Russia and Belarus to EBRD finance and expertise, and the Bank has closed its offices in Russia and Belarus.

"The war on Ukraine raises the spectre of worsening food security globally, because Ukraine is a significant food exporter. Ukraine exports account for about 10 per cent of the globally traded wheat and corn and 37 per cent of sunflower oil, United Nations figures show," the EBRD said.

The shareholders of UkrSibbank are French BNP Paribas (60%) and the European Bank for Reconstruction and Development (EBRD).

According to the National Bank of Ukraine, as of July 1, 2022, in terms of total assets, UkrSibbank ranked eighth (UAH 91.48 billion) among 68 operating banks in Ukraine, and its net profit for the first half of the year amounted to UAH 724.1 million.

Astarta is a vertically integrated agro-industrial holding operating in eight regions of Ukraine. It includes six sugar factories, agricultural enterprises with a land bank of 220,000 hectares and dairy farms with 22,000 cattle, an oil extraction plant in Hlobyne (Poltava region), seven elevators and a biogas complex.