Kernel Group

Location:

Ukraine

Project number:

52659

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Approval date:

25 Feb 2021

Status:

Approved

PSD disclosed:

22 Jan 2021

Project Description

The provision of up to USD 80 million in the form of a participation in syndicated senior secured revolving credit facility to finance working capital needs of Kernel Group. The EBRD financing will support the Group's operations in what remains to be challenging environment as the Covid-19 pandemic is ongoing. Working capital financing is associated with the procurement, storage, processing, transportation of agricultural commodities, and their export. 

Project Objectives

Provision of working capital financing for the Group's activities in Ukraine. 

Transition Impact

The Project is expected to have a significant transition impact under the Well-Governed and Competitive transition qualities. Under the Well-Governed quality, the project will support improvements in the Group's climate governance practices and alignment with recommendations from the Taskforce on Climate-related Financial Disclosure (TCFD). More specifically, this will include the development of a formal climate change strategy for the Group and a decarbonisation pathway based on science based targets as well as improvement in current climate-related disclosures practices and risk management processes.

Under the Competitive quality, the project will support an increase in pre-financing as well as expanded access to and usage of digital solutions by the Group's partner farmers.

Client Information

KERNEL HOLDING SA

Kernel Group is a leading Ukrainian vertically-integrated agribusiness, engaged in oilseed crushing, grain trading, crop farming, transshipment, and silo services.

EBRD Finance Summary

USD 80,000,000.00

Total Project Cost

USD 300,000,000.00

Additionality

EBRD offers a large volume instrument that fills a market funding gap and is required to structure the project and also due to adverse market conditions, e.g. the COVID-19 crisis. Client makes use of EBRD expertise on corporate governance improvements, including for climate risk management.

Environmental and Social Summary

Categorised B (ESP 2020). Kernel is an existing client of the Bank and has previously been the subject of extensive environmental and social (E&S) due diligence. The Company is currently implementing an environmental and social action plan (ESAP) covering both corporate and individual facility actions. E&S due diligence for this new facility comprised review of the existing ESAP and annual E&S reporting provided in the context of existing projects. Progress to date on implementing the ESAP is satisfactory. The Company has adequate capacity and systems to manage the E&S issues relevant to its activities and there were no significant E&S issues raised through annual reporting. The Company will be required to continue to implement the agreed ESAP and ensure that all facilities financed by the EBRD are structured to meet the Bank's Performance Requirements.

Technical Cooperation and Grant Financing

None

Company Contact Information

Michael Iavorskyi, IR Manager
ir@kernel.ua
+380 44 461-88-01 ext 72-75
+380 44 461-88-01
https://www.kernel.ua/
3, Tarasa Shevchenka Lane Kyiv, 01001, Ukraine

Implementation summary


PSD last updated

22 Jan 2021

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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