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DFF-MK Group Loan



Project number:


Business sector:


Notice type:


Environmental category:


Approval date:

06 Sep 2022



PSD disclosed:

14 Sep 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 project consists of provision of EUR 25 million loan to be used for the MK Group's ("Borrower", "Company") capital investments in its farming and sugar operations in Serbia, as well as for debt refinancing. 

Project Objectives

The main objective of the project is to support the MK Group's equipment modernisation and upgrade as well as to support the MK Group's resilience and balance sheet strength.

Transition Impact

ETI score: 64

Primary quality: Inclusion. i) The Bank will support the Company in advancing the country's digital transformation through targeted skills development on a client and sector-wide level, including development of a training institution offering multiple courses to upskill professionals. ii) The Company will also work with universities to introduce new/update outdated curricula to include digital skills training in agribusiness programs, and offer students opportunities to advance their acquired skills through on-the-job-learning opportunities. iii) Through participation in Serbia's Agriculture Sector Skills Council (SSC), the Company will support the integration of digital skills training into national agriculture curricula as well as the development of occupational and accreditation standards.

Secondary quality: Resilience. The Bank will support the food safety in the country and the wider region via capital expenditure investments in regards to irrigation equipment, which will lead to sustaining the area of land sown and yield increase of the irrigated grains.

Client Information


MK Group is an agribusiness company operating in Serbia and a subsidiary of MKG Agrinvestment Ltd., a vertically integrated agribusiness group in Serbia, engaged in sugar, farming, meat processing, logistics, and other segments.

MKG Agrinvestment is a subsidiary of MK Holding Ltd, a diversified corporate group in the region with operations in Serbia, Croatia, Montenegro, and Slovenia.

EBRD Finance Summary

EUR 25,000,000.00

Total Project Cost

EUR 25,000,000.00


Standard-setting (helping projects and clients achieve higher standards) - the Bank will share knowledge and support the client in introducing gender-responsive training programmes in agribusiness. In addition, and supported by TC, the Company will work on increasing their female talent pipeline through targeted outreach at the Company's partner university, with a target of 50% women interns as part of their newly developed internship program.

Financing Structure - EBRD's participation is required to fill the financing gap alongside local commercial banks, and support diversification of financial sources, including sculpted repayment, necessary to structure the project.

Environmental and Social Summary

Categorised B (ESP 2019) and rated Low-Medium risk. Environmental and social risks related to the MK Group's agricultural operations in sugar production, farming, meat production and processing, and distribution are predominantly site specific and can be managed by appropriate mitigation measures. The ESDD was carried out both in-house by ESD through the review of E&S reports, E&S questionnaires, supporting documents and site visits. The project is consistent with the GET approach and the GET share is 16%.

The E&S review covered a wide range of topics including the potential E&S risks and liabilities of Company's own farming and production facilities, occupational health & safety, food 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 some E&S impacts, and those impacts are well managed through implementation of international standard ISO-certified environmental, health, safety, food safety and quality management systems by a team of competent E&S managers. The new transaction's PR reporting will need to be benchmarked against the ESP 2019.

An initial physical climate risk screening of the project was conducted at concept stage and resulted in a PC score of 1. Several physical climate hazards, including increasing extreme heat events, increasing mean temperature, wildfires, drought and erosion have been flagged as being potentially material to the project sites. Materiality checks (i.e. second-stage assessments) have been undertaken for all identified physical climate hazards and, where necessary, mitigation measures have been incorporated into the project. As a result, the alignment of the project with the adaptation goals of the Paris Agreement has been confirmed, and the physical climate risk is considered to be sufficiently mitigated.

To address identified E&S issues, an environmental and social action plan (ESAP) has been developed and will be agreed with MK Group management prior to signing. The ESAP is structured to ensure the Company's compliance with the Bank's Performance Requirements and includes measures to bring the Company's pig production in line with EU animal welfare standards and best practice asbestos management. The Company will be required to provide annual reporting on its E&S performance and implementation of the ESAP.

Technical Cooperation and Grant Financing

A TC funded by Japan will support the Inclusive Transition Impact of the Project focused on human capital development, specifically digital skills development, through in-house training, university programmes and national curricula and occupational standards development. The size of the TC is up to EUR 50,000. The TC is expected to be part of a larger funding for the above topics, with a minimum client contribution to the total cost of 20%.

Company Contact Information

Andrija Vukovic
+381 11 3539 599
MK Group d.o.o. Bulevar Mihajla Pupina 115e 11070 Novi Beograd

PSD last updated

14 Sep 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

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794

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 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 to get guidance and more information on IPAM and how to submit a request.


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