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EBRD introduces scheme for pre-harvest financing in Poland
Joining forces with Raiffeisen Bank Polska S.A. and Limagrain Central Europe
The European Bank for Reconstruction and Development together with Limagrain Central Europe and Raiffeisen Bank Polska are providing pre-harvest financing to eligible firms under a pilot financing scheme that was signed today. The agreement envisions Polish distributors and farms receiving loans from Raiffeisen Bank Polska to finance their purchase of seeds. The EBRD, Raiffeisen Bank Polska and Limagrain Central Europe will cooperate in providing up to €10 million to these businesses.
The parties will share the risk of each loan, which will have a maturity to match the crop season. The aim is to increase the liquidity in the Polish agricultural sector through an established local bank and Europe's leading seed company.
Hans Christian Jacobsen, EBRD Director of Agribusiness, said that while post-harvest financing is becoming more available, pre-harvest financing is still very much constrained by lack of appetite of banks. He hopes that the scheme's successful implementation in Poland will result in an increase in pre-harvest financing and a replication of the risk-sharing structure in other countries.
Francoise Faure, Chief Financing Officer of Limagrain, says the scheme will provide Limagrain Central Europe's clients in Poland with increased opportunities to purchase Limagrain's high-quality seeds and moreover accelerate Limagrain's expansion into other parts of central and eastern Europe.
On behalf of Raiffeisen Bank Polska, Vice President and member of the Management Board Jaroslaw Dabrowski welcomed the opportunity to expand the cooperation with the EBRD in agro-food industry financing. Raiffeisen Bank Polska has already been involved in other EBRD projects, and its parent RZB-Austria is the second most active co-financier with the EBRD across the region. "I am pleased that we have the chance to continue a good practice and especially that we will support the agricultural sector this time, so near EU accession", he said.
Limagrain Central Europe has been operating in Poland since 1991 and is business leader in maize seeds on the Polish market. LCE is actively looking into ways to expand its operations in central and eastern Europe. LCE is a subsidiary of Groupe Limagrain, a French farmers-owned group and the largest seed company in Europe.
Raiffeisen Bank Polska was established in 1991. It is fully owned by Raiffeisen Zentralbank Oesterreich (RZB-Austria), the core institution within the Austrian Raiffeisen Banking Group, which has a 25 per cent share in its domestic market. Raiffeisen Bank Polska operates 61 outlets throughout the country and employs over 1400 people.
The EBRD was established in 1991 following the collapse of communism, to aid the transition from centrally planned to market economies in central and eastern Europe and the Commonwealth of Independent States. To date, the EBRD has signed 177 projects worth more than €3 billion in the agribusiness sector throughout the Bank's countries of operations.
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