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IFC and EBRD Support Russia and Ukraine to Increase Farm Production, Decrease Global Food Prices


In Kiev:
Olena Harmash

Phone: +380 (44) 490 64 00
E-mail:
oharmash@ifc.org

In Moscow:

Nezhdana Bukova

Phone: +7 (495) 411 7555

E-mail:
nbukova@ifc.org


Kiev, Ukraine, March 31, 2011—IFC, a member of the World Bank Group, and the European Bank for Reconstruction and Development, are partnering to promote the introduction of new financial instruments that could boost Russia and Ukraine’s agricultural output and help reduce global food prices.

IFC and EBRD are helping both countries examine how laws might be changed to help increase investment in agribusiness operations and the feasibility of allowing farm owners to use future harvests as collateral when applying for loans. A similar initiative in Brazil in the early 1990s saw access to finance for agribusiness and crop outputs rise substantially as a result.  


“This initiative, which should result in joint EBRD and IFC lending against future crops, will give a boost to the development of agribusiness in EBRD countries of operations, enabling local companies to access funding for their growth,” said Peter Bryde, EBRD Deputy Director for Agribusiness.


Currently, the agriculture sector in Russia and Ukraine is constrained by regulations that prevent financial institutions from lending to farm businesses using future harvests as security. IFC and EBRD will help officials from the two countries study the applicability of the Brazilian model there.  


“IFC/EBRD involvement in this type of commodity-backed lending will have a demonstration effect on other financiers, capitalizing on the grain export potential of both countries,” said Elena Voloshina, IFC Country Representative in Ukraine.


In early March, officials from Russia and Ukraine travelled to Brazil to meet with key stakeholders and learn more about that country’s success with crop receipts legislation. Funding to study the feasibility of crop receipts legislation in Russia and Ukraine comes from the EBRD’s Shareholder Special Fund, the UN’s Food and Agricultural Organisation and USAID.

About IFC

IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries. We create opportunity for people to escape poverty and improve their lives. We do so by providing financing to help businesses employ more people and supply essential services, by mobilizing capital from others, and by delivering advisory services to ensure sustainable development. In a time of global economic uncertainty, our new investments climbed to a record $18 billion in fiscal 2010. For more information, visit
www.ifc.org.