- EBRD lends €9.6 million to improve Ukraine’s grain export facilities
- Loan to Agrosem to expand rail terminal near Polish border, build grain transhipment complex
- EBRD loan is accompanied by €1.5 million investment grant from USA
The European Bank for Reconstruction and Development (EBRD) is lending €9.6 million to Ukrainian agribusiness firm Agrosem to expand a rail terminal near the Polish border and develop a grain transhipment complex and container yards facility which will increase exports of grain from the country.
The EBRD loan is accompanied by a €1.5 million investment grant from the USA, within the country’s contribution to the EBRD’s Ukraine Crisis Response Special Fund, as well as a €2.6 million equity contribution from the company. The EBRD has committed to invest €3 billion in Ukraine in 2022-23, with a focus on food and energy security, trade, vital infrastructure and the private sector.
This project will improve Ukraine’s transport connectivity with the European Union to the country’s west by addressing the shortage of modern transhipment capacity at the Ukrainian-Polish border, a key infrastructure bottleneck currently constraining grain exports. Ukraine is a leading food producer and interruptions in supply are detrimental both to Ukrainian agribusiness and for world food security.
Since Russia invaded Ukraine last year, Ukraine has faced major disruptions to its economy and supply chains from attacks on critical infrastructure and uncertainty over whether goods can be exported via its ports, which traditionally moved over 90 per cent of the country’s grain and oilseeds to foreign markets. This investment will facilitate the development of alternative overland routes for exporting grain.
A legacy issue for Ukrainian export to Europe by rail is that the country’s railway lines are built with the wide gauge used across the region in the 19th century, rather than the narrow gauge used in Europe.
To address this, the first stage of the project – which was completed last November – includes an automated facility for direct grain transhipment between broad- and narrow-gauge railcars.
Stage 2 will see the construction of an elevator complex with a storage capacity of 22,000 tonnes and expansion of the rail track infrastructure. The grain complex will have a throughput capacity of over 400,000 tonnes a year and should be completed by the end of 2024. A container transhipment facility will also be built on the existing rail terminal in the same timeframe.
This project will also help Agrosem to maintain the productive capacity of its employees, and includes a technical cooperation component for addressing the mental health needs of staff.
Agrosem Group is one of the top five distributors of fertilisers, agricultural machinery and inputs in Ukraine. It is also involved in farming and agricultural commodity trading activities and operates a proprietary rail terminal in Lviv region in western Ukraine.