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EBRD and DemirBank promote food security in Kyrgyz Republic

By Anton Usov

  • Loan of US$ 4 million to leading food commodities supplier Dan Agro
  • New deal under risk-sharing facility between EBRD and DemirBank
  • Innovative financial product to promote agribusiness lending

Farmers and consumers across Central Asia will have a better supply of packaged legumes (beans, lentils and peas) manufactured in accordance with the highest international food safety and health standards following an agreement between the European Bank for Reconstruction and Development (EBRD), Dan Agro Products (Dan Agro) and DemirBank of the Kyrgyz Republic.

Dan Agro has received a loan of US$ 4 million from DemirBank that was backed by the company’s inventory, with part of the risk being shared by the EBRD under a risk-sharing facility between the two financial institutions. This innovative financial product, which was not previously available yet in the Kyrgyz market, will support the company’s working capital needs.

This approach is crucial during the Covid-19 pandemic, when producers and customers need to plan longer operational and trading cycles. Once successfully introduced, the product may be replicated by other financial intermediaries in the Kyrgyz Republic.

Dan Agro Products is based in the Kyrgyz Republic and supplies agricultural commodities, including around 150,000 tonnes of pulses a year. The company guarantees purchases of produce from more than 2,000 farmers across the country. It is a fully owned subsidiary of Turkey’s Bashan Tarimsal Urunleri, a leading international producer of legumes, grains and oily seeds.

Dan Agro has been working with the EBRD since 2018 and has previously benefited from the Bank’s Kyrgyz Sustainable Energy Financing Facility supported by the European Union. The latest transaction is supported by grant funding from the governments of Switzerland and Turkey.

Dan Agro has also achieved ISO compliance for the entire operation, including the introduction of the ISO 2200O food safety management standard and improved its financial reporting thanks to consultancy projects offered by the Bank’s Advice for Small Businesses supported in the Kyrgyz Republic by Switzerland and the European Union via the EBRD’s Small Business Impact Fund.

To date, the EBRD has invested €795 million through 191 projects in the economy of the Kyrgyz Republic, with a majority of investments supporting private entrepreneurship.

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