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EBRD provides $100 million to support agriculture in Kazakhstan
Works with leading Kazakh banks to support Warehouse Receipts Programme
Kazakhstan's agribusiness sector is set to become more efficient and competitive as farmers, traders and companies dealing in agriculture-related goods get more access to finance following a $100 million loan from the EBRD to two leading Kazakh banks.
Kazkommertsbank and Bank TuranAlem are each receiving $50 million under the EBRD-sponsored Warehouse Receipts Programme, which enables banks to on-lend to local agriculture businesses, using receipts for commodities stored in licensed warehouses as collateral. The loans build on an additional $5 million to Halyk Savings Bank and $2.5 million to Almaty Merchant Bank signed last month, bringing the EBRD's total lending to Kazakhstan under the programme to $107.5 million.
Warehouse receipts provide farmers and traders with access to finance, which provides a reliable means of producing, storing and exporting grain at competitive prices. The programme, started in 1998, operates in countries that are major agriculture producers. These include Bulgaria, Kazakhstan and the Slovak Republic. The Bank is working to introduce warehouse receipts in Russia, Ukraine, Romania, Poland, Lithuania and Croatia.
Noreen Doyle, First Vice President of the EBRD, said the programme is an important and proven tool for financing agribusiness, and that the loans would greatly support the development of agriculture in Kazakhstan. "We will draw on our successful experiences elsewhere to support Kazakhstan's under-nourished agribusiness sector," Ms Doyle said. "This type of lending will not only help financing of a difficult sector but ultimately help the economy through the development of the agribusiness sector."
The deal also marks the first time part of a loan under the Warehouse Receipts Programme, in Kazakhstan, is being syndicated to commercial banks which were actively involved in structuring the transaction - Rabobank International of the Netherlands and SG, the corporate and investment banking arm of France's Société Générale Group. To date the EBRD has signed 166 projects worth €2.8 billion to assist the agribusiness sector throughout central and eastern Europe and the Commonwealth of Independent States.
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