EBRD supports alternative grain export routes in Ukraine

By Vanora Bennett

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  • EBRD lends €10 million to Ukraine grain producer to increase resilience in wartime
  • Loan will support Grain Alliance Group’s grain exports from Ukraine via Slovak hub
  • Company’s hub storage and transshipment capacity to be expanded

The European Bank for Reconstruction and Development is lending €10 million to the Ukrainian grain producer Grain Alliance Group to improve and expand its overland export capacity, sidestepping Russian disruption of exports via the Ukrainian ports which traditionally moved over 90 per cent of the country’s grain and oilseeds to foreign markets.

Ukraine is a leading food producer and interruptions in supply are detrimental both to Ukrainian agribusiness and for world food security. 

Russia’s war on Ukraine, which began in February, has forced producers to seek road and rail routes to international markets rather than via ports, which have been blocked.  Congestion on existing overland routes has limited exports, with investment needed to address border crossing bottlenecks.

The Grain Alliance Group’s response has been to develop the resilience of its own business and the agribusiness sector as a whole by developing alternative logistics routes from Ukraine. In the spring of 2022, the group acquired a grain logistics hub just over Ukraine’s border with Slovakia, in the city of Cierna nad Tisou.

The EBRD’s loan will finance an expansion of the Slovak hub to provide transshipment capacity of 400,000 tonnes a year. It will support the Grain Alliance Group to increase storage capacity, upgrade and automate infrastructure, and buy grain hoppers, locomotives and trucks for secure transport of grains from its Ukrainian elevators to the Slovak hub and onwards to final customers.

This investment will be also crucial for continued revenue generation, preserving more than 1,000 jobs and securing access to livelihoods for people affected by Russia’s war on Ukraine.

The Grain Alliance Group is a Swedish-owned mid-sized agri-holding in Ukraine.

The loan is in line with the Solidarity Lanes package, a programme established by the European Commission and EU-bordering countries to safeguard global food security and aid Ukraine’s economy, in which the EBRD is investing €300 million.

The five-year loan will be supported by the donor-funded EBRD Crisis Response Special Fund via partial guarantee within the EBRD’s resilience package in response to Russia’s war on Ukraine. It is also supported by the EBRD’s Shareholder Special Fund (SSF) and Japan-EBRD Cooperation Fund.

The EBRD is Ukraine’s biggest institutional investor. Since February, the Bank has committed more than €1 billion, and aims to triple that figure by the end of 2023. The EBRD’s primary focus is to support the ‘real’ economy – maintaining energy and food security, restoring rail infrastructure, and supporting trade and the private sector. The EBRD was swift to condemn the Russian invasion and has closed its offices in Russia and Belarus.

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