Project description
and objectives:
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The proposed project aims to promote and develop a secure approach to
agricultural commodity financing in Russia, Ukraine and Kazakhstan (the
“Region”). The financing is structured as ownership-based commodity repo
financing, under which Rabo purchases agricultural commodities from
agribusiness companies in the Region (typically processing companies) and at
the same time sells the commodities forward at a price, which includes
financing costs and margin. Rabo Invest and the EBRD would share the risks of
the ultimate clients.
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Transition impact:
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The transition impact of the project is considered to be strong. Agricultural
Commodity Financing Program with Rabo Invest, originally started in Russia,
now has outgrown the boundaries of this one country and is to become a truly
Regional Program. The participation of the Bank in the new financing has
several benefits for this project and for the agribusiness sector in the
Region in general:
(i) it enables the continued provision of working capital financing to local
agribusiness companies, who otherwise could not receive financing in the
absence of the properly functioning warehouse receipts (“WHR”) system in
Russia and Ukraine;
(ii) it continues to prepare the ground for the WHR system in Russia and
Ukraine while the institutional framework is being established, by setting up
procedures for licensing of warehouses and asset-backed lending to local
companies;
(iii) by adding credibility to Rabo Invest’s operations, it provides a
demonstration effect for other lenders in the agricultural commodities market
of the Region, which may lead to increase in financing provided by the local
banks.
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The client:
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The EBRD's nominal client will be Rabo Invest (a 100 per cent-owned subsidiary
of Rabobank International) or its subsidiaries. However, the main
beneficiaries of the financing will be agribusiness SMEs in the Region,
typically processing and/or trading companies.
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EBRD finance:
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Limited recourse loan, funded or unfunded to Rabo Invest to finance
agribusiness companies in the Region. The EBRD’s maximum exposure in this
project will be US$200 million. Rabo Invest and the EBRD share the risks of
the ultimate clients in each of the sub-projects. The EBRD participation will
have a maturity of up to 12 months. However, the EBRD loan can be rolled over
on an annual basis for the next 3 years.
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Total project cost:
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The total project amount is estimated at ca. US$780 million, subject to
adjustment depending on the market needs in the relevant agricultural season.
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Environmental impact:
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The key environment, health and safety risks associated with this project are:
a) that the commodities purchased and stored by Rabo Invest may not be of
sufficient quality or deteriorate during storage, therefore making them
unsaleable
b) that the borrowers may not purchase the commodities. The latter could
occur, because the borrowers are impacted by problems of an environmental
nature, which restrict their ability to operate.
Therefore, Rabo Invest must ensure that warehouses utilised to store
commodities meet the necessary standards to maintain quality, and that
borrowers are required to comply with national standards for environment,
health and safety. Rabo Invest will provide the Bank with annual confirmation
that these requirements have been met.
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Technical
cooperation:
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None.
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement
of consultants.
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Company contact:
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Maarten Pronk, Chairman of the Executive Board
Tel: +7 095 721 1984
Fax: +7 095 721 1985
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EBRD contact:
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Jan Schroeder-Hohenwarth, Operation Leader: schroedj@ebrd.com
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Business opportunities:
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For business opportunities or procurement, contact the client company.
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General enquiries:
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EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
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