To strengthen food security in the face of Russia’s invasion of Ukraine, the United States’ International Development Finance Corporation (DFC), the international Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) are providing a US$480 million financing package to leading Ukrainian agribusiness group MHP. The funding will help the company to maintain its operations and boost its sustainable power generation capacity, reducing its carbon footprint.
Ukraine’s agribusinesses have suffered damages of up to US$8.8 billion since February 2022, according to the Kyiv School of Economics, including destruction and damage to agricultural machinery, granaries, and manufactured goods. The sector is also facing increased production costs, energy shortages, a decline in production of crops and livestock, and logistical problems. To remain operational and ensure stable production, access to financing is critical.
DFC will provide a US$ 250 million loan to MHP to support the Ukrainian poultry and grain producer’s efforts to mitigate the effects of Russia’s war against Ukraine. The funds will be used to refinance maturing debt and support the company’s poultry and grain production. It will also support the company’s ability to increase food production and storage and support its export capacity.
IFC’s funding includes a US$ 30 million loan to upgrade and expand MHP’s agricultural waste-to-energy facility. That will substantially increase the company’s green power generation capacity, which is expected to reduce its carbon footprint.
The EBRD is lending US$ 100 million to support MHP to sustain its financial resilience through the refinancing of its Eurobonds at a time of limited access to capital markets.
As part of its cooperation with the EBRD, MHP has committed to strengthening its climate corporate governance via a technical assistance assignment funded by the Clean Technology Fund under the High Impact Programme.
MHP is a leading international food and agrotech group, and Ukraine’s largest producer of poultry, culinary, and processed meat products. The company employs more than 28,000 people in Ukraine and, despite experiencing disruptions in 2022, re-established supply and export routes to continue to export to more than 70 countries. In addition, MHP supports thousands of smaller businesses, including more than 2,000 small retail stores and 2,500 local farmers in Ukraine.
