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EBRD and Rabobank strengthen cooperation
$286 million available for 2002/3 Russian agribusiness season
The European Bank for Reconstruction and Development and Rabobank, one of the world's biggest agricultural banks, have signed an agreement providing up to $286 million in short term working capital finance for the 2002/2003 agribusiness season. This doubles the EBRD's commitment to Rabobank's existing Russian agrifinance programme to $100 million from $50 million last year.
The main beneficiaries of the new facility are Russian soft-commodity traders, food processors, sugar refineries, oilseed crushers and grain millers in the main agricultural centers of Russia. As such, the facility will encourage the development of the agribusiness sector in Russia.
Through this alliance, the EBRD strengthens its relationship with Rabobank, whose focus on the agribusiness sector provides a dedicated partner with whom the Bank can work closely in developing new products in a number of emerging markets, EBRD President Jean Lemierre said after meeting with Rik van Slingelandt, acting Chairman of Rabobank's Executive Board.
Mr van Slingelandt said he expected that by the end of 2002 Rabobank will have provided in excess of $300 million in finance to 12 EBRD projects in Russia, Ukraine and Kazhakstan. "The agreement signed between the EBRD and Rabobank in relation to our Russian operations reflect our increased cooperation with the EBRD in Central and Eastern Europe and the CIS," Mr van Slingelandt added.
The innovative Russian scheme, in which the EBRD and Rabobank are sharing risks, provides borrowers with a practical way of using harvested commodities as collateral so as to raise working capital. The shortage of such capital is a major constraint on the growth of the Russian agricultural sector.
The facility will support Rabobank's Russian subsidiary to finance the purchase of sugar, wheat, sunflower seeds and other commodities and store the commodities in carefully selected warehouses, pending their repurchase by the original sellers. While in storage, the goods will be insured by reputable international insurance groups.
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