The European Bank for Reconstruction and Development (EBRD), a multilateral development finance institution headquartered in London, and Raiffeisen Bank Aval, a subsidiary of Austria’s Raiffeisen Bank International, have partnered to issue loans to Ukrainian farmers so that they can purchase farming equipment from a third partner in the project, US-based agricultural machinery provider John Deere. Small and medium-sized Ukrainian farms can apply to receive local-currency loans with terms up to five years from Raiffeisen Bank Aval and its subsidiary Raiffeisen Leasing Aval Ukraine. While the size of the loans has not been released, the total lending for the project is targeted at the equivalent of USD 50 million. EBRD, Raiffeisen Bank Aval and John Deere will share the risk on the loans disbursed.
Approximately 70 percent of agricultural equipment in Ukraine is reportedly obsolete, reducing the overall efficiency of agricultural production.
As of January 1, 2013, EBRD has committed approximately USD 10.7 billion to 318 projects in Eastern Europe, Central Asia and North Africa. As of 2011, Raiffeisen Bank Aval reported total assets of UAH 54.2 billion (USD 6.65 billion). Raiffeisen Bank reports total assets of EUR 147 billion (USD 197 billion) as of September 31, 2012.
By Charlotte Newman, Research Assistant
About the European Bank for Reconstruction and Development (EBRD)
The European Bank for Reconstruction and Development (EBRD) is a development finance institution headquartered in London. The bank began operations in 1991 upon the agreement of 40 countries and is now owned by 61 countries as well as the European Investment Bank and the European Union. It aims to finance operations that are both commercially viable and assist development in 29 countries in Eastern Europe, Central Asia and more recently in Southern and Eastern Mediterranean region. It does this by providing loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs). As of January 1, 2013, EBRD has committed approximately USD 10.7 billion through 318 projects.
About Raiffeisen Bank International
Raiffeisen Bank International (RBI) is an Austria-based group of banks, leasing companies and other financial service providers operating in 17 countries. RBI is a subsidiary of Raiffeisen Zentralbank Österreich AG (RZB) and a member of the Austrian Raiffeisen Banking Group. Raiffeisen Bank reportedly total assets of EUR 147 trillion (USD 197 trillion) as of September 31, 2012.
Sources and Additional Resources:
EBRD Press Release: “EBRD, Raiffeisen Bank Aval and John Deere Team to Support Primary Agriculture in Ukraine,” http://www.ebrd.com/pages/news/press/2013/130116c.shtml
MicroCapital.org story, January 30, 2013, “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development Loans $1.35m to LandesLease of Albania to Support Small and Medium-Sized Enterprises (SMEs),” https://www.microcapital.org/?s=European+Bank+for+Reconstruction+and+Development&x=0&y=0
MicroCapital.org story, January 9, 2012, “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) to Loan $100m to Small Businesses in the Ukraine, First $10m disbursed to Credit Europe Bank Ukraine,” https://www.microcapital.org/microcapital-brief-european-fund-for-reconstruction-and-development-ebrd-to-loan-100m-to-small-businesses-in-the-ukraine-first-10m-disbursed-to-credit-europe-bank-ukraine/
MicroCapital Universe Profile: European Bank for Reconstruction and Development (EBRD)
http://microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+%28EBRD%29
MicroCapital Universe Profile: Raiffeisen Bank International
http://microcapital.org/microfinanceuniverse/tiki-index.php?page=Raiffeisen+Bank+International
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