The EBRD is lending €16mn to two Serbian agribusiness companies Fabrika TE-TO Senta and Star Secer (Nova Crnja), both owned by the Italian sugar producer SFIR Group to purchase raw products from local farmers.
The loan will provide both companies with access to financing to purchase sugar beets from farmers by using agriculture commodities as collateral. The loan, part of the EBRD’s strategy to boost lending against such commodities in Serbia and Montenegro, is in parallel with a loan of around €4mn from HypoVereinsBank Yugoslavia, a subsidiary of Germany’s HypoVereinsBank (HVB), to Fabrika TE-TO Senta.
Hans Christian Jacobsen, director of the EBRD’s agribusiness team, says the bank looks forward to working with SFIR and HVB to promote agricultural commodity-backed lending in Serbia and Montenegro. Such a system provides local farming and agribusiness entities with liquidity while commodities are being stored for later sale, Jacobsen adds.
Using commodities as collateral for loans is part of a €500mn EBRD strategy being successfully implemented across central and eastern Europe and the Commonwealth of Independent States. The instrument should prove particularly important in Serbia and Montenegro this year, given the difficulties the sector is expected to suffer due to local drought.
Dragica Pilipovic, director for Serbia and Montenegro, says agribusiness is an important part of the economy of Serbia and Montenegro and will be a major driver of the country’s growth in the future, which is why the EBRD is very happy to expand its lending to this sector.
Vincenzo Maria De Rosa, chief financial officer of SFIR, says the transaction demonstrates SFIR’s commitment to its operations in Serbia and Montenegro which is a region of long term strategic focus for the group.
The EBRD has now signed 184 investments in the agribusiness sector totalling more than €3bn, and 17 investments worth €398mn across all sectors in Serbia and Montenegro.