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EBRD to support agribusiness in Kyrgyzstan
Farmers in Kyrgyzstan will benefit from an ECU 6.9 million (US$ 9 million equivalent) loan from the European Bank for Reconstruction and Development (EBRD), signed today in London. The loan in favour of Kyrgyz Agribusiness Company (KAC), a private sector limited-liability company incorporated in Kyrgyzstan, will help supply essential agricultural inputs, farm equipment, storage facilities and extension services to farmers, and provide a mechanism for processing, marketing and distribution of grain products.
Jacques de Larosière, President of the EBRD, said at the signing: “This represents a significant import substitution for a country that is heavily reliant on grain imports. In addition, by strengthening important intermediate markets the project will enhance the transition to a market economy of significant related sectors of agriculture, both upstream and downstream. It is also encouraging to note that through the operation of a successful pilot project the concept has already attracted great support from the farming community.”
The project will be structured around KAC, a new private company owned by four leading foreign investors (Cameco Corp., Rhone-Poulenc Agrochimie S.A., AgrEvo GmbH and O&T Agdevco Ltd.) and four strong local enterprises. The project will target at least 50 farms, comprising a minimum of 50,000 hectares of land, at a total cost of ECU 16.5 million.
KAC will employ over 500 people and, indirectly, the project will encourage employment and stimulate growth along the entire agribusiness chain. The company is committed to operating to internationally accepted environmental standards.
This project is the first of its kind in Central Asia and is the EBRD’s first investment in agriculture in Kyrgyzstan. It will increase grain yields through the timely provision of essential agricultural inputs and services and re-establish regular raw material supplies to industry and grain supplies to the public. Once the project is fully implemented it is expected that grain yields will increase by at least 200,000 tonnes a year.
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