- US$ 2 million senior secured loan to H&M Agro to finance green technology-based expansion
- Investment to boost production and exports, reducing the use of land, water and fertilisers
- EU to provide grant, advisory support, Türkiye to provide complementary technical support
The European Bank for Reconstruction and Development (EBRD) is supporting Azerbaijan’s agribusiness sector by investing in the green expansion of agricultural producer H&M Agro. The senior secured loan, equivalent to US$ 2 million in local currency, will help the company to expand its hydroponic greenhouses.
The funds will be used to install efficient and environmentally friendly greenhouses in Salyan city, which will help H&M Agro to achieve higher yields and protect the environment through the efficient use of land, water and fertilisers. This will boost H&M Agro’s competitiveness, enabling it to diversify its customer base internationally.
The European Union (EU), under its EU4Climate initiative, will complement the loan with grant support of up to 13 per cent of eligible costs through the EBRD’s Finance and Technology Transfer Centre for Climate Change (FINTECC).
‘’Together with our partners, we are pleased to boost sustainable farming methods in Azerbaijan and support agricultural producer H&M Agro with its expansion plans,’’ said Catarina Bjorlin Hansen, EBRD Director, Regional Head of the Caucasus. ’’This investment will allow the company achieve higher agricultural productivity to meet the growing demand, increase its competitiveness on the international markets while at the same time will result in more efficient use of resources. ‘’
“This financing to H&M Agro is a practical example of how the Economic and Investment Plan can help Azerbaijani businesses expand their activity, reach new markets while reducing their energy footprint. The EU and the EBRD will continue to work together to deliver on our joint ambition to diversify the economy and create more jobs in Azerbaijan” said Lawrence Meredith, Director for the Eastern Neighbourhood in the European Commission.
Türkiye will support the company on Azerbaijani legal due diligence. With funding from the EU, the EBRD’s Advice for Small Businesses programme has helped the company to improve its financial reporting in line with International Financial Reporting Standards.
Hydroponic techniques are an eco-friendly way of cultivating crops. They are a non-conventional method that enables producers to significantly reduce water consumption by foregoing the use of soil. This results in higher yields and increased efficiency.
H&M Agro is one of the first agricultural producers in Azerbaijan to establish commercial trade relationships with the Gulf countries. In this way, the company aims to diversify its export markets.
Azerbaijan is one of the largest exporters of fruits and vegetables in the region. The sustainability of its agribusiness sector is increasingly important as the country diversifies away from the predominant oil and gas sector.
The EBRD is a leading institutional investor in Azerbaijan. Since the start of its operations there in 1992, the Bank has invested more than €3.75 billion in 184 projects across different sectors, including finance, corporate, infrastructure and energy, with most of those investments in private enterprises. The Bank’s strategy in the country focuses on helping Azerbaijan to diversify its economy and develop the non-oil private sector.