Provision of an additional USD 10 million tranche to Astarta Group, one of the leading agricultural companies in Ukraine, creating additional liquidity cushion to mitigate a general risk of Ukrainian commercial banks reducing exposure to corporate clients during the COVID-19 crisis. This follows a senior secured long-term loan of up to USD 20 million to finance working capital approved by the EBRD Board on 18 July 2018.
The loan will finance working capital needs of Astarta Group associated with its farming, sugar and soybean processing operations.
ETI score: 61
The Transition Impact of the investment project builds on the Competitive and Inclusive transition qualities:
- Competitive: The project is expected to contribute to efficiency and productivity gains through the introduction of modern IT solutions and farming techniques (precision farming) as well as to support the strengthening of backward linkages to local suppliers and the improvement of their standards and their contractual terms.
- Inclusive: The project will also support Astarta Group to develop and implement cooperation programmes with local universities and schools, contributing to improved access to training and employment opportunities for young people.
The additional USD 10 million tranche to finance working capital needs is expected to help ensure that the transition impact under the initial project remains achievable despite some delays and that it can be preserved.
Astarta Group is one of the largest vertically-integrated agricultural companies in Ukraine, operating eight sugar plants, around 230,000 hectares of leased arable land as well as dairy farms and engaged in soybean processing.
EBRD Finance Summary
Total Project Cost
The EBRD financing is provided in the extraordinary circumstances of the Covid-19 crisis that have impacted the economy and limited new lending opportunities in the markets. During macroeconomic uncertainty some local banks can potentially suspend disbursements as most of the working capital lines are uncommitted and require annual renewals. The EBRD will provide committed two-year working capital financing as opposed to uncommitted short term working capital lines provided by commercial banks.
Environmental and Social Summary
Categorised C (2014 ESP). The environmental and social risks associated with the provision of working capital are not expected to be significant and do not require specific due diligence. Astarta's environmental and social impacts and corporate management systems are well known to the Bank from the five previous transactions and an audit of the company was carried out by independent consultants in September 2017 for the Astarta Grain transaction. The company is implementing the agreed ESAP and provides detailed annual environmental and social reports. http://www.ebrd.com/work-with-us/projects/psd/astarta-grain.html
Technical Cooperation and Grant Financing
The Project will have a Technical Cooperation (TC) component provided by the Japan-EBRD Cooperation Fund under the "Project Preparation Support Programme for Agribusiness Projects in Ukraine". The TC funds will partially cover the legal due diligence costs.
Company Contact Information
Mr. Viacheslav Chuk
+38 044 585 94 94
04070, Kiev, Yaroslavska str., 58
PSD last updated
09 Jul 2020
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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