EBRD extends US$ 25 million loan to Trans-Oil Group

By Olga Rosca
@olgarosca


The European Bank for Reconstruction and Development (EBRD) is providing a US$ 25 million loan to Trans-Oil Group of Companies (Trans-Oil Group), a leading agricultural commodities trader and sunflower oil producer in Moldova.

The funding will boost agriculture in Moldova and Ukraine as restricted availability of finance continues to seriously limit the sector’s ability to reach its full potential.

The EBRD’s loan will enable Trans-Oil Group to expand its grain terminal in the Moldovan port of Giurgiulești on the river Danube and to acquire and modernise a grain storage facility in the neighbouring port of Reni, in Ukraine.

Over the last decade Trans-Oil Group has grown steadily to become Moldova’s largest agribusiness company, exporting to the EU, North Africa and the Middle East. It covers the full agricultural value chain from farming, grain handling, storage and trading to wheat flour production, oilseed crushing and oil bottling.

Trans-Oil Group uses Giurgiulești, Moldova’s only port, as its main grain terminal. As the capacity of the Giurgiulești terminal is fully utilised at peak times, the company started renting and operating a grain storage facility in Reni, located only 3 km away in Ukraine. The company now intends to buy the Reni terminal, which is already well integrated into its operations but requires further modernisation to accelerate and streamline the turnover of commodities.

Increasing the capacity of the silos at Giurgiulești and acquiring the storage facility in Reni will enable Trans-Oil Group to export Moldovan grain and oilseeds more efficiently and in greater volume.

Furthermore, the Reni terminal will help to increase the volume of grain collected in Ukraine’s Budzhak region, which lies along the Black Sea between the Danube and Dniester rivers.

With the modernised infrastructure, by 2017 the company will be able to collect five times more grain in Ukraine than it does now. It will also be able to establish cooperation with larger numbers of farmers and provide them with technical advice on sustainable and profitable farming.

In addition, the expanded facilities will enable Trans-Oil Group to meet demand for storage and drying services from  independent Moldovan farmers  and exporters in Giurgulești. The Moldovan silos will be available for hire by third parties for operations of 250,000 tonnes or more.

Gilles Mettetal, EBRD Director for Agribusiness, said: “The EBRD is delighted to continue its support to Trans-Oil Group, which is a Moldovan commodity trader able to compete with regional and global players. But our financing goes beyond the company. We are contributing to the creation of an improved infrastructure for grain trading in Moldova and Ukraine, which will also benefit local farmers and other exporters, promote regional integration and forge closer investment ties between the two countries.”

The EBRD and Trans-Oil Group are longstanding partners. The Bank has provided loans to the company in 2004, 2009 and 2013 to finance acquisitions or the purchase of agricultural commodities as well as the construction of a sunflower seed crushing plant in Ceadir Lunga.

The EBRD is the largest institutional investor in Moldova and Ukraine. To date the Bank has committed €1.9 billion for over 100 projects in the agribusiness sectors of both countries.