The International Development Finance Corporation (DFC), the International Finance Corporation (IFC), and the European Bank for Reconstruction and Development (EBRD) have collectively offered a $480 million financing package to MHP SE, a leading Ukrainian agribusiness group. This move comes in the wake of Russia's invasion of Ukraine, aiming to sustain MHP's operations and bolster its sustainable power generation capacity at its agricultural waste-to-energy facility.
The DFC will provide a $250 million loan to MHP SE to counter the effects of Russia's war on Ukraine. The loan will be utilized for refinancing maturing debt and supporting poultry and grain production. It is also anticipated to enhance food production and storage, strengthen export capacity, and alleviate food insecurity issues exacerbated by the war.
Additionally, IFC is extending a $30 million loan for the upgrade and expansion of MHP's agricultural waste-to-energy facility, which will significantly augment the company's green power generation capacity. An additional $100 million loan will be provided by IFC to help MHP enhance its financial stability by refinancing its Notes due in May 2024.
The EBRD is providing a $100 million loan, backed by Spain and the EBRD Crisis Response Special Fund, to support MHP in maintaining financial resilience through the refinancing of its Eurobonds during a time of limited access to capital markets.
Despite disruptions in 2022, MHP SE, Ukraine's largest producer of poultry, culinary, and processed meat products, has managed to re-establish supply and export routes to over 70 countries. The company employs over 28,000 people in Ukraine.
According to the Kyiv School of Economics, Ukraine's agribusiness sector has incurred damages amounting to $8.8 billion since February 2022 due to the war. These damages encompass the destruction of agricultural machinery, granaries, and manufactured goods, increased production costs, energy shortages, and a decline in poultry and grain production.
The EBRD met its €3 billion financing target for Ukraine’s real economy in 2022-23 amidst the Russian conflict. The bank supports neighboring countries and pledges continued assistance with a proposed capital increase of €3-5 billion by year-end. A $100 million loan to Ukraine’s agribusiness sector, part of a larger €480 million package for MHP, helped achieve this target. The EBRD is part of the Ukraine Co-investment Platform and supports the Trade Facilitation Programme (TFP), and the European Solidarity Lanes initiative.
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