USAID to invest $44 mln in development of storage, infrastructure of Kernel, Nibulon and Grain Alliance

USAID to invest $44 mln in development of storage, infrastructure of Kernel, Nibulon and Grain Alliance

The United States Agency for International Development (USAID) has announced cooperation with three large Ukrainian agricultural holdings to support storage and infrastructure expansion

U.S. Agency for International Development (USAID) announced three new partnerships to help Ukraine overcome immediate and long-term export logistics challenges caused by Russia’s full-scale war. USAID, Grain Alliance, Kernel, and Nibulon plan to make combined investments of more than $44 million to support storage and infrastructure expansion in Ukraine’s agriculture sector. The investments are projected to increase Ukraine’s grain shipping capacity by more than 3.35 million tons annually, bolstering Ukraine’s economy and bringing much-needed grain to the global market.

The co-investments include $8 million from the USAID Agriculture Resilience Initiative-Ukraine (AGRI-Ukraine) and more than $36 million from these three private sector partners. The transshipment investments will increase grain export operations at three terminals: Izmail and Reni in Ukraine, both on the Danube, and Čierna nad Tisou in Slovakia. Kernel and Nibulon investments cover a range of expansion needs. This includes design and construction to renovate berths at the Port of Reni and to expand the Port of Izmail operations capabilities. Grain Alliance will be purchasing a transshipment storage facility in Slovakia which will include building silos and procuring transport equipment such as trucks and railcars. USAID’s funding is being used to procure grain loading equipment, temporary storage structures, and remanufactured locomotives for use in Ukraine.

Agriculture, the bedrock of the Ukrainian economy, accounts for nearly 20 percent of Ukraine’s GDP, employs 20 percent of the workforce, and generates more than 40 percent of total export revenues. The USAID-led AGRI-Ukraine helps Ukraine increase its capacity to produce, store, and export grain to the world and stabilize global prices. AGRI-Ukraine supports Ukraine’s embattled economy, and helps alleviate the global food security crisis exacerbated by Russia’s war on Ukraine. AGRI-Ukraine provides critical agricultural supplies, improves export rail logistics and efficiency, increases farmers’ access to finance, and supports storage, drying, and processing needs.

Аgricultural companies, farms and agriculture land (farmland) for sale in Ukraine

Increasing Export Volumes

Grain Alliance has operated in Ukraine for more than 20 years, helping solidify Ukraine’s role as one of the world’s largest food exporters. Grain Alliance currently cultivates around 60,000 hectares and operates six grain elevators with a total drying and storage capacity of more than 300,000 tons. In May of 2022, Grain Alliance secured the Čierna nad Tisou transshipment facility in Slovakia to provide an uninterrupted route for Ukrainian producers to transport grain by rail. After the first successful shipment in June, 100,000 tons of grain had already been shipped by mid-December. The expansion allows Grain Alliance to increase export volumes by more than 500,000 tons annually along this overland corridor.

Improving Export Efficiency

Kernel is Ukraine’s largest producer and exporter of sunflower oil and largest exporter of grain. Its integrated grain and oilseed value chain includes 363,000 leasehold hectares under farming, 3.5 million tons capacity for sunflower seed crushing, 2.3 million tons of storage capacity, and 10 million tons capacity at deep-water export terminals. Over the past 15 years, Kernel has invested more than $2.5 billion in the Ukrainian economy. In 2022, Kernel secured sunflower oil and meal transshipment capacities in the Ukrainian Port of Reni on the Danube River. This past summer, Kernel invested in barges, coasters, and handy-size carriers for grain and oil to make exports via the Danube River more efficient. This new investment in berth access will allow for a 600,000 tons per annum increase in volume.

Expanding Export Capabilities

Over the last 30 years, Ukraine’s Nibulon LLC has created a vertically integrated grain logistics infrastructure network that includes 80,000 hectares under cultivation and a total capacity of over 2.25 million tons storage. Nibulon employs 6,000 people and has invested more than $2.3 billion in the Ukrainian economy. This includes $600 million in a fleet of 82 modern vessels, currently blocked because of Russia’s aggression. Nibulon’s recent investments include a new Bessarabska transshipment terminal at the Port of Izmail. This expansion builds on Nibulon’s expertise, starting in 2009, in constructing more than 13 river ports in the E40 International Inland Waterway, which includes the Ukrainian rivers Dnipro and the Southern Buh, also currently blocked due to the war. With a carrying capacity of 300,000 tons per month, the Bessarabska terminal expansion facilitates an additional 2 million tons of exports annually.

USAID’s partnership with these three companies, two Ukrainian and all with deep ties to the local agricultural economy, will help support Ukraine and its people as the country continues to defend itself against Russia’s unjust and unprovoked full-scale invasion. USAID has contributed an initial $100 million to AGRI-Ukraine, and, with these new partnerships, has leveraged more than $70 million in private sector investments. USAID seeks to leverage an additional $80 million from fellow donors, the private sector and foundations, with an overall investment target of $250 million.

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