MHP Farming

Location:

Ukraine

Project number:

45253

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Approval date:

29 Oct 2013

Status:

Complete

PSD disclosed:

27 Sep 2013

Project Description

The EBRD is considering increasing debt exposure to MHP Group up to US$ 100 million. The additional financing of up to US$ 55 million would:
i) finance the acquisition of agricultural and grain infrastructure operations in Russia, and
ii) finance capital expenditures related to agricultural equipment for MHP Group’s agricultural farming operations in Ukraine.

Transition Impact

The Bank’s financing will facilitate:
i) Successful development of agricultural lands in Russia and Ukraine, which are currently inefficient by improving energy and resource efficiency and improving crop production methods; and
ii) The transfer of knowledge/experience of effective farming methods to the Russian entity to improve crop yields and reduce production costs.

The Client

MHP Group (“MHP”) - a vertically integrated grain / fodder and poultry producer in Ukraine.

EBRD Finance

US$ 100 million.

Project Cost

US$ 100 million.

Environmental Impact

Categorised B. Under the existing project with MHP Group, implemented in 2010, the Bank commissioned an independent environmental and social audit of MHP’s activities. The audit included an assessment of animal welfare issues, and it noted that animals observed were in good condition and appropriate policies and procedures have been developed to manage animal welfare issues. The Bank also co-operated closely with the International Finance Corporation, which shared due diligence findings with the Bank. The EBRD due diligence reviewed MHP Group’s environmental and social management systems and its performance against EBRD's Performance Requirements (PRs) and included site assessments of a selection of the Group's production facilities. The recommendations resulting from the due diligence were formulated into an Environmental and Social Action Plan (ESAP) that was finalised and agreed with the client prior to EBRD Board approval of the project. The ESAP covers a number of areas including corporate level management actions, generic actions uniform across production sites, and site specific actions. MHP has been providing updates to EBRD, through the annual environmental and social reporting process, on the implementation of the ESAP. It is evident from these reports, that MHP Group is making good progress in the implementation of the ESAP and that there are no actions that are behind date. EBRD will continue to monitor progress through both annual environmental reports and site visits as and when considered necessary.

As part of the 2010 project, EBRD partially financed the construction of MHP’s first biogas facility that uses floating sludge and chicken manure, with a capacity to produce 4 MW of electricity and 4 MW of thermal energy. The facility has been completed and will be operating at full capacity by end-2013. The technology used will help reduce MHP’s carbon footprint and the cost of production.

Since July 2013, only four Ukrainian enterprises have secured the right to export their products to the European Union, because their meat and meat products comply with the requirements of the European Union's legislation. Three of these enterprises are part of MHP Group, which have been approved as a result of a long process of improvements and inspections involving EU veterinary staff.

The current project under consideration is not anticipated to create any additional significant environmental and social impacts. Newly acquired agricultural operations will be integrated into the environmental and social management system of MHP and reporting provided by MHP will cover the activities of the newly acquired agricultural and grain infrastructure operations in Russia.

Technical Cooperation

None.

Company Contact

Anastasiya Sobotyuk
Head of Investor Relations and Communications Department
email: a.sobotyuk@mhp.com.ua

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP 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. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.

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