MHP EUR 24 million agri loan under RLF

Location:

Ukraine

Project number:

53698

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Approval date:

22 Apr 2022

Status:

Disbursing

PSD disclosed:

16 Jun 2022

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

The Project comprises financing of MHP's working capital needs for crop farming.

Project Objectives

The main objective of the Project is to enable sufficient financing for successful crop farming season.

Transition Impact

ETI score: 70

The Project is part of the Food Security Ukraine package presented under the Resilience and Livelihoods Framework and contributes to the Framework's objective to help sustain the provision of services and safeguard business activities in Ukraine, with the ultimate goal of preserving livelihoods.

 

Primary Quality Resilient:

1.1 The project supports food security in Ukraine by increasing the resilience of corporates, SMEs and aggregators in the agricultural value chains and contributing to reducing losses of supply chain disruptions, which should increase food availability in the region.

 

Secondary Quality Inclusive:

2.1 Availability of and access to food as a vital good for safeguarding people's livelihoods

2.2 Preservation of human capital of affected local workforce and internally displaced persons (IDPs)

Client Information

MHP PRJSC

PrJSC MHP, incorporated in Ukraine, subsidiary of MHP Group, one of the leading grain, poultry and feed producer in Ukraine and South Eastern Europe. The Group operates 360,000 ha land bank in Ukraine.

EBRD Finance Summary

EUR 24,000,000.00

Total Project Cost

EUR 24,000,000.00

Additionality

Additionality stems from the following:

Terms: As a result of the war on Ukraine, the market for liquidity and long-term financing in Ukraine is nearly closed or significantly constrained, with both local and international financial institutions tightening their risk appetite.

EBRD attributes: Relevant experience in terms of financing of private clients in the target sectors. 

Environmental and Social Summary

The provision of working capital to support crop production would not normally be associated with significant E&S risks although, with the current situation, there are a number of heightened concerns particularly around health and safety. MHP is a long standing client of EBRD and has been the subject of a number of due diligence and monitoring processes. For previous projects, and as required, Environmental and Social Action Plans have been developed, and completed, to address key project-related E&S issues and ensure compliance with the Bank's Performance Requirements.

Given the current circumstances in-country, and the speed and urgency of the required financing, there has been limited opportunity to conduct additional environmental and social due diligence and agree any necessary and additional requirements. Due diligence for this Project therefore relied on due diligence and other information from previous projects and annual environmental and social reporting. From these the Bank judged that performance on environmental and social issues remains satisfactory. The Company will be required to continue to comply with the Bank's PRs and to provide annual environmental and social reporting to the Bank.

Technical Cooperation and Grant Financing

TC: Project Preparation Support Programme for Agribusiness Projects in Ukraine to cover legal due diligence costs associated to the project. The TC is funded by the Japan-EBRD Technical Cooperation Fund.

Non-TC: The Project is approved on the basis of first loss risk cover by Shareholder Special Fund (SSF) or other donor funding.

Company Contact Information

Anastasiya Sobotyuk
a.sobotyuk@mhp.com.ua
+38 044 207 00 88
https://mhp.com.ua/
PrJSC "MHP", 158, Ak.Zabolotnogo Str Kyiv, Ukraine, 03143

PSD last updated

17 Jun 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.

 

Share this page: