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Romanian grain producers benefit from EBRD financing
To overcome one of the main obstacles for grain producers in the central Balkan region, the European Bank for Reconstruction and Development (EBRD) is providing a US$ 13 million (ECU 11.9 million) loan to develop new grain-handling and storage facilities at the port of Constanta in Romania. An eight-year loan will be extended to Silotrans s.r.l., a Romanian joint-venture company formed between East Point Holding Ltd (EPH), a major Cyprus-based grain trading company, and Romtrans S.A., a major Romanian transportation company.
Jacques de Larosière, President of the EBRD, said upon signing: "The lack of efficient, fully privately operated facilities in the grain-handling business has been identified as one of the main impediments to the grain producing capacity in the region." He continued: "By assisting one of the key players in this area to establish efficient grain handling in the port of Constanta, the EBRD's project will encourage other private sector enterprises to develop similar projects."
The loan will be used for the construction of a sea-port grain terminal at the port of Constanta (on the west coast of the Black Sea), including bulk storage of 100,000 tons and facilities for handling road and rail freight, as well as loading and unloading systems for barges and ships. The total project cost will be US$ 23.4 million (ECU 21.4 million).
By introducing additional capacity for grain handling, the project will alleviate a significant bottleneck in the import-export of grain commodities and will therefore bring economic benefits to the region. The project will also reduce the overall transport costs for long sea journeys and generate cost savings for grain handling. Part of these savings would be passed on to producers and thereby lead to increases in grain production.
The loan comprises US$ 8 million (ECU 7.3 million) from the EBRD's own account while the Cyprus Popular Bank has in principle agreed to lend a further US$ 5 million (ECU 4.5 million) through participating in a syndicated loan arranged by the Bank.
Silotrans is owned by EPH (80 per cent) and Romtrans (20 per cent). It was set up for the sole purpose of building and operating the new Constanta grain terminal facilities.
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