EBRD lends US$ 90 million to support Ukraine’s sunflower oil

The European Bank for Reconstruction and Development (EBRD) will lend US$ 90 million to MHP Group, one of the leading grain, poultry and edible oils producers in Ukraine and southeastern Europe, to support the production of sunflower oil for export from Ukraine and maintain the livelihoods of employees and oilseeds suppliers in Ukraine.

In recent years, Ukraine has produced one third of the world’s sunflower oil and accounted for nearly half of sunflower oil global exports, playing a crucial role in the global food security and edible oils supply.

“Russia’s war on Ukraine has disrupted operations across the economy and existing supply chains, negatively impacting Ukraine’s sunflower seed harvest and sunflower oil production and putting further pressure on agriculture produce availability and prices, increasing the need to support the sector,” said EBRD in a statement.

“MHP Group operates three sunflower crushing plants in Ukraine and is among the biggest sunflower oil producers in the country. The loan will finance MHP’s seasonal working capital needs for its edible oil crushing segment in Ukraine, allowing the company to procure the sunflower seeds to crush into edible oil for export,” EDRB added.

First loss risk cover is provided by the United States of America through its contribution to the EBRD Crisis Response Special Fund. The finance comes with a technical cooperation grant of €75,000 to enhance the group’s capacity for economic inclusion of people with disabilities and war veterans.

The project is approved under the Resilience and Livelihoods Framework, adopted by the Bank to support the country’s economy after Russia invaded on 24 February last year. The Framework’s objective is to help sustain the provision of services and safeguard business activities in Ukraine, with the ultimate goal of preserving livelihoods.

MHP is listed on the London Stock Exchange. In Ukraine, MHP is engaged in all stages of poultry production as well as being a major producer of grain and edible oils. The company employs around 29,000 people in Ukraine.

As Ukraine’s biggest institutional investor, the EBRD has pledged to invest €3 billion in the country in 2022-23. In 2022, it deployed €1.7 billion, mobilising €200 million more through partner banks and €1.4 billion through donors.

To address the economy’s current needs, the EBRD is prioritising five areas: trade finance, energy security, vital infrastructure, food security (covering the provision of liquidity to farmers via banks for the spring sowing campaign as well as to agribusiness companies and food retailers) and support for the private sector.