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EBRD, Rabobank increase cooperation in Russian agriculture
The European Bank for Reconstruction and Development and Rabo Invest, the Russian subsidiary of Rabobank International, have extended their landmark commodity-backed financing programme to help develop Russia's agricultural sector. Following last year's success, the two banks will again provide up to $143 million (€157 million) to finance the purchase of sugar, wheat and other commodities by Russian processors and traders. The EBRD's share will be $50 million.
The aim is to overcome the lack of seasonal financing that is one of the key problems of the agribusiness sector in transition economies. It draws on the successful experience of similar schemes in Hungary, Bulgaria and Slovakia.
"The continued cooperation between the EBRD and Rabobank is good news for one of the most important segments of the Russian economy. Agribusiness has not only demonstrated strong growth the last few years, but is gradually becoming one of the driving forces of the economy, alongside oil, gas and metals," said Alexey Belyaev, General Director of Rabo Invest. His colleague Philip ter Woort, Rabobank Country Manager for Russia, added: "The extension of the Rabo-EBRD programme ties very well into the RUR 1.2-billion ruble bond issue which Rabo Invest recently announced and which can be used to finance part of the commodity portfolio."
Hans Christian Jacobsen, Director of the EBRD's Agribusiness Team, said the programme has clearly been popular with market participants and that by extending it, the banks will be able to support even more new clients. Last season around 20 Russian food traders and processors received financing under the programme. "The point is to inject liquidity into Russia's food chain," Mr Jacobsen said. The scheme has been a way of providing structured financing products for Russia's agribusiness sector pending approval of legislation to set up a full-fledged warehouse receipt programme, Mr Jacobsen added.
Rabobank is one of the largest agricultural banks in the world. Founded in 1898, it has €343 billion of assets, AAA rating, and significant experience in financing commodities in emerging markets.
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