The International Finance Corporation (IFC) of the World Bank Group, the European Bank for Reconstruction and Development (EBRD) and the U.S. International Development Finance Corporation (DFC) are providing the Ukrainian agricultural holding MHP, the largest chicken producer in Ukraine, with $480 million to refinance debt and maintaining current activities within the framework of strengthening food security in the context of the war launched by the Russian Federation.
"The funding will help the company maintain its operations and boost its sustainable power generation capacity, reducing its carbon footprint," the IFC said.
"IFC's funding includes a $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. Prior to the investment, IFC also advised MHP on how to align with IFC's Performance Standards, which are widely considered the international benchmark for sustainable development. IFC is extending additional $100 million loan to help MHP enhance its financial stability by refinancing its notes due in May 2024," it said.
"IFC's financing is backed by a first-loss guarantees from the United Kingdom acting through its Foreign, Commonwealth & Development Office, the IFC Canada Facility for Resilient Food Systems, and other sources of blended concessional finance, further strengthening agribusiness and energy security in the country," the report says.
"The EBRD is lending $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," according to the document.
"The loan will be supported by a guarantee from Spain, as well as credit support from the EBRD Crisis Response Special Fund (France, Canada, Italy, Japan, Norway, Switzerland, the United Kingdom, Germany, Netherlands, Denmark and the USA) in line with the EBRD's resilience package in response to Russia's invasion of Ukraine. The project's legal due diligence is supported by Japan. 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 Program," the report reads.
"DFC will provide a $250 million loan to MHP SE to support the Ukrainian poultry and grain producer's efforts to mitigate the effects of Russia's invasion of Ukraine. The funds will be used to refinance maturing debt and support the company's poultry and grain production. The loan would also support the company's ability to increase food production and storage and support its export capacity, while mitigating the devastating effects of food insecurity exacerbated by the war," it says.
"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," reads the report.
"This investment underscores our longstanding partnership with MHP and our commitment to helping the country build back greener and better," said Rana Karadsheh, IFC's Regional Director for Europe.
IFC's funding is part of its $2 billion Economic Resilience Action program, launched last year to preserve economic activity and job creation amid Russia's invasion of Ukraine. It also complements IBRD's program to support agriculture in the country, including support for essential logistics and to improved access to affordable financing for small farmers.