EBRD Committing $60 Million to Vegetable Oil Producer, Savola Foods
As part of its planned expansion of financing activity in the agribusiness sector of Kazakhstan, the European Bank for Reconstruction and Development (EBRD) has made a US$60 million loan to vegetable oils producer, Savola Foods, based in Aktobe, Kazakhstan.
The funds will be used to increase the company’s vegetable oil production, install new bottling and packaging equipment, expand the company’s storage capacity, improve the company’s resource and energy efficiency, and to integrate new technologies into the company’s production systems.
Kazakhstan “has strong potential for growing oilseeds and producing vegetable oils,” according to the bank, “but most production equipment is outdated.”
Since the launch of the EBRD’s latest strategy for Kazakhstan in December 2013, the bank has been targeting an increase in its financing activities in the country with a particular focus on agriculture and agribusiness. One week prior to the announcement of the loan to Savola Foods, the EBRD announced a $50 million local-currency loan to Kazakh beverage producer, RG Brands.
“We at the EBRD are already increasing our involvement in agriculture,” the President of the EBRD said while addressing Kazakhstan’s Foreign Investors Council in June, “and we certainly want to do more to reform the sector and to increase its role in the economy.”
Agriculture accounted for 4.9% of the country’s gross domestic product (GDP) in 2014, according to the CIA Factbook, and investment in its agriculture sector totaled $891 million for the year – 17% higher than in 2013, according to the country’s analytical service, Ranking.kz. Currently, the country is in the process of implementing its Agribusiness 2020 program, a scheme planned for 2013-2020 to bring development to its agro-industrial sector.
The EBRD is the largest financial investor in Kazakhstan outside the oil and gas sector, investing $7.2 billion to date.