DFF - Milk Euro Food



Project number:


Business sector:


Notice type:


Environmental category:


Approval date:

29 Apr 2022



PSD disclosed:

25 Apr 2022

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

The provision of a US$ 6.3 million (€ 6.0 million) senior secured loan (the Loan) to Uzbekistan based producer of spreads and butter JV Milk Euro Food LLC. It will consist of two tranches: the amortising tranche of US$ 3.3 million (Tranche 1) and the revolving tranche of US$ 3.0 million (Tranche 2).

Up to US$ 750,000 of the loan amount will be co-financed by the Innovation and Sustainability in Agribusiness Value Chains Account of the Financial Intermediary and Private Enterprises Investment Special Fund sponsored by Taiwan International Cooperation and Development Fund (the TaiwanICDF).

Project Objectives

The Bank's financing will be used to (i) consolidate and extend the maturity of existing loans from local banks (US$ 3.3 million), (ii) finance working capital needs (US$ 2.7 million) and (iii) the acquisition of refrigerators US$ 0.3 million (together, the Project).

Transition Impact

ETI score: 80

The DFF SME framework primarily targets the Competitive quality by helping SMEs to restructure and become more efficient or professional. Sub-projects can target any of the other transition qualities as secondary objective. This Project is supporting framework objectives by supporting an SME in the following areas: Competitive and Well-Governed. Under Competitive quality, the project will help the company to improve standards in line with internationally recognised certification by obtaining the ISO 45001 and increase capacity utilisation. Under Well-Governed quality, the project will help the company to improve its financial management.

Client Information


JV Milk Euro Food LLC ("MEF", "Milk Euro Food", the "Borrower" or the Company), organised under the laws of Uzbekistan and located in Chirchik, Tashkent region, is a privately owned producer of spreads and butter.

EBRD Finance Summary

USD 6,300,000.00

Total Project Cost

USD 6,300,000.00


Identified triggers

A significant share (at least 30 per cent) of the Project is for refinancing: The rationale for the refinancing is the current deficiency of the financing structure that does not reflect the seasonality of the business and does not allow for full capacity utilisation of the Borrower.

Additionality sources

Financing Structure. The EBRD offers a tenor, which is longer than available to the client in the market on reasonable terms and conditions.

Standard-setting: Client seeks/makes use of the EBRD expertise on higher financial standards, including through financial covenants.

Standard-setting: Client seeks/makes use of the EBRD expertise on higher environmental standards, above 'business as usual' (e.g. adoption of emissions standards, climate-related ISO standards etc.).

Environmental and Social Summary

Categorised B (ESP 2019). Environmental and social risks related to the Milk Euro Food's operations in margarine production and distribution are predominantly site specific and can be managed by appropriate mitigation measures. The ESDD was carried out in-house by ESD in line with the COVID-19 approach through the review of E&S questionnaires, supporting documents and calls. The project is consistent with the GET approach and the GET share is 4.8 per cent. The E&S review covered a wide range of topics including the potential E&S risks and liabilities of Company's own production facility, occupational health & safety, supply chain management, labour practices, emissions and potential climate risks. No significant or unidentified risks were revealed through the due diligence process. The review demonstrated the Company's operations have limited E&S impacts which are largely managed through implementation of ISO-certified food and quality management systems and implementation of a new H&S management system. The Company's core raw material is a blended vegetable edible oil that contains palm oil. Due to its limited buying power and location the Company has few supplier options for its vegetable oil and none that can offer 100 per cent Roundtable for Sustainable Palm Oil (RSPO)-certified palm oil. The Company's only current supplier is Cargill (since 2013) who source their palm products (oil and related products) from their own plantations and from third party mills, refiners and traders currently 22.27 per cent of their palm products are certified by the RSPO. Cargill have full traceability in their palm oil supply chain to the mills; and are working towards full traceability to palm plantations in high risk/priority landscapes in order to better manage E&S risks present in some areas, in addition to extensive monitoring and reporting.

The project was deemed to be significantly exposed to physical climate risks (PCR), with a PCR score of 9 out of 10 at CRM. This scoring was related to a number of physical climate risk issues such as extreme heat events, drought and flooding. Due diligence revealed that the Borrower has mitigation/resilience measures in place to cope with the predicted physical climate risks: the production facility and warehouses are equipped with climate control systems that can withstand project extreme heat; limited water is used in the production process and is used mainly for washing equipment and therefore droughts have very limited effects on the Borrower's operations and the production facility and the warehouses are located 50 meters above the maximum water level in case of extreme flooding. To address the limited identified issues, an environmental and social action plan (ESAP) has been developed and will be agreed prior to signing. The ESAP includes implementation of accident reporting and GBVH policy. The Company is required to provide annual reporting on its E&S performance and implementation of the ESAP.

Technical Cooperation and Grant Financing

1. Market due diligence / ID 96484. TCRS project # 14378. Grant approval date: 20.07.2021. Donor: SBIF, partial client contribution;

2. Legal due diligence / ID 96484. TCRS project # 14378. Grant approval date: 20.07.2021. Donor: SBIF, partial client contribution.

3. A non-TC FINTECC grant. Amount: EUR 39,000. Source: Global Environment Facility.

4. 10% first loss risk cover by IFCA 2. 

Company Contact Information

Andrey Dankov
+998 (78) 750 5656
+998 (78) 750 5656
Chirchik city, Tashkent region Uzbekistan

PSD last updated

18 May 2022

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.


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