Recent developments in Agribusiness in EBRD Rome 2005 Hans Christian Jacobsen
Agribusiness in EBRD in 2004 • Total EBRD commitments in 2004: €4.133bn • Including €701m in the Agribusiness sector • Record number of Agribusiness Projects: 53 • In 18 out of 26 countries of operations • Co-financing: €343m (including unfunded risk participation)
EBRD & Agribusiness: Annual Investments EBRD annual investments in Agribusiness (million €) • To date: EUR 3.25 bn invested in over 220 projects • Growing annual commitments
Selected investments in 2004 Retail Getro • Second largest retailer in Croatia. • Two projects financed by EBRD • €25 million (2002) & € 35 million (2004) • Modern distribution and retail improves price transparency, competition and quality standards throughout the Croatian food chain. • The projects offer reliable market outlets to farmers and local agro-processing enterprises
Retail in Agribusiness in 2004 • Retail continues to be a strategic focus for the agribusiness sector. • Strong linkages throughout the food chain • Promotes quality improvement • Promotes competitiveness • Offers better, cheaper products to consumers • Other retail transactions in 2004 included: Cora, Boliari, Migros and Getro
Selected investments in 2004 Early Transition Countries:M-Pro • Largest dairy company in Azerbaijan • US$ 5.7 million debt and equity financing • Improving corporate governance through EBRD 25% equity stake and seat on the board. • Contribution to backward linkages through improving the standards of milk collection through additional tanks and premium payments to farmers for better quality milk. • Development of higher hygienic and quality standards through greater range of consistently packaged and presented dairy products for the consumer.
ETC in Agribusiness in 2004 • Early Transition Countries have been and continue to be priority countries for the Bank. • New instruments have been developed • Additional resources have been allocated, including Technical Cooperation • Other ETC projects in 2004 included: Iberia Refreshments and Teliani Valley wine in Georgia, Trans Oil inMoldova and Berad-Agro in Uzbekistan
Selected investments in 2004 Commodity Financing: Evrotek • USD 10 m participation in USD 20 million working capital loan arranged by HVB Ukraine • Evrotek -one of leading Ukrainian edible oil companies, dynamic and fast growing • Facility is secured on the warehouse receipts, a newly established instrument actively promoted by EBRD • Financing is for procurement of the sunflower seeds for further processing (STOZHAR brand).
Commodity Financing in Agribusiness in 2004 • Commodity financing continues to play an important role • Grain Receipt law is now in place in main agriculture countries (Kazakhstan, Ukraine, Romania, Poland, but not Russia yet) • Role of the Bank is changing • more risk sharing with local banks • more direct cooperation with large local traders/processors • Other examples of commodity financing projects in 2004 included: Regional Commodity Programme, ATF, BTA and Bank Caspian in Kazakhstan, Aval and Toepfer in Ukraine
Selected investments in 2004 working with local entrepreneurs - Marbo • EUR 10 m long-term debt • One of Serbian success stories in the agribusiness sector • Works with potato growers • Constant capacity increase which leads to increased demand of quality potatoes • Growing quantities of potatoes purchased and produced – over 25k t in 2004
Local Enterprise and Agribusiness in 2004 • Local businesses represent growing investment opportunities. • Companies become more transparent with improved corporate governance • They have a performance track record • Integrity remains an issue to consider carefully • Other transactions with local enterprises in 2004 included: Frikom, Fresh & Co, Boliari, Evrotek, Cherkizovsky & Lenta
Conclusion • Bank is moving East • Working role with local businesses but higher risks • Finding different ways to continue to provide liquidity to farmers • Emphasis on retail starting to pay off • Still a long way to go……..
How to contact the EBRD Hans Christian Jacobsen Director, Agribusiness Tel: +44 207 338 6669 E-mail: jacobseH@ebrd.com