The European Bank for Reconstruction and Development is providing a €80 million (US$ 105 million) loan to Metro Group Kazakhstan to finance the expansion of its wholesale facilities in this country.
Metro Group is the fourth largest retailer in the world in terms of revenue and an active investor in the EBRD region.
Parts of this 7-year loan will also be available in local currency, in line with the EBRD’s focus on increasing local currency lending in its countries of operations. The EBRD’s financing will be used to build up cash and carry stores across the country.
The project will promote modern retail practices including in the country’s more remote areas. Metro wholesale stores will establish strong forward linkages to independent local retailers, small corner shops and traders and raise the overall quality of the country’s retail sector. With Metro’s plans to source up to 90 per cent of its food products locally, the project also creates important business development opportunities for local SMEs and farms specialising in growing fruits, vegetables and animal breeding in the country’s groceries segment.
Today’s loan announcement was made on the eve of the EBRD’s 20th Annual Meeting in Astana where its participants will discuss the lessons that have been learnt from the crisis within the economies where the EBRD invests.
Among other key topics on the current agenda they will also focus on the ways to improve food supply chains, and develop supportive financial instruments to meet the food security challenge.
“With this key investment, the Bank’s support is aimed at continuing to provide assistance to the country’s small businesses and helping local customers to have a reliable access to quality products. Our project will improve the retail sector and will play an active role in strengthening further development of food supply chains in Kazakhstan,” said Varel Freeman, EBRD Vice President.
Frans Muller, CEO of Metro Cash & Carry said that "Metro is delighted to conclude its first project with EBRD in an important country like Kazakhstan and we hope that the cooperation between our institutions will be expanded to geographies where we both operate".
In about four decades, Metro Cash & Carry has grown from a Western Europe-centred wholesale concept to a leading international player in self-service wholesale, operating about 700 outlets in 30 countries.
Since the beginning of its operations in Kazakhstan, the EBRD has invested over €2.8 billion in over 130 projects in various sectors of the Kazakh economy, mobilising additional investments in excess of about €6 billion, with about 70 per cent of the projects’ being investments into the development of the country’s private sector.