The European Bank for Reconstruction and Development (EBRD) is considering providing a loan of up to USD 37 million to the company MV Cargo Ltd. for financing construction of a grain terminal at the Yuzhny port (Odessa region). This issue will be considered at a meeting of the board of directors of the EBRD on 9 December, the financial institution said in a statement.
The company will implement the project in partnership with Cargill, one of the largest providers of food, agricultural, financial, and industrial products and services in the world, and the Ukrainian Seaports Authority, the state enterprise responsible for supervising the functioning, maintenance and development of the Ukrainian seaports and their infrastructure. The grain terminal will have an annual throughput capacity of up to 5 million tonnes of grain.
The total project cost is USD 130 million. The project is intended to be co-financed by the International Finance Corporation, which would provide a parallel loan of up to USD 37 million to the company. The amount of funding to be provided by Cargill and the the Ukrainian Seaports Authority is unknown.
According to the EBRD statement, MV Cargo was created specifically for implementation of this project.
The project has already passed the conceptual review stage and its final review is by the EBRD is pending. The environmental and social due diligence for the project is ongoing, and it includes an independent third party environmental and social audit to assess MV Cargo's ability to implement the project in accordance with the bank’s performance requirements, as well as an an independent environmental and social audit to assess MV Cargo's management capacity and systems to manage environment, health, safety and labour issues in its operations and an analysis of the potential (future) environmental and social due impacts and benefits.
As reported previously, Cargill, the Ukrainian Seaports Authority, and MV Cargo Ltd. signed a tripartite memorandum for this project. The memorandum states that Cargill will purchase 51% of the terminal. The terminal will handle grains, grain by-products, and other goods. The first phase of the terminal will have a capacity of 5 million tons. The second phase will increase the capacity by 2-4 million tons. The terminal is tentatively scheduled to be launched in 2017.
Cargill recently expressed interest in construction of a port grain terminal on the Black Sea, which would facilitate implementation of its long-term strategy for development of its grain and oilseed business in the Black Sea region. The terminal at the Yuzhny port will be another Cargill joint venture along its joint ventures with the ports of Constanta (Romania) and Novorossiysk (Russia).