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Local currency loan of US$ 60 million will fund expansion of production and storage of edible oils. The European Bank for Reconstruction and Development (EBRD) is expanding its presence in the agribusiness sector in Kazakhstan with a local currency loan to Savola Foods, a domestic producer of vegetable oils, based in the country’s Aktobe region.

 

Savola Foods will use the EBRD’s tenge loan equivalent to US$ 60 million to increase the production of vegetable oils, expand storage capacity, install a new bottling and packaging line and improve the energy and resources efficiency of its operations.

The project is in line with EBRD plans to increase its support to the agribusiness sector in Kazakhstan, outlined by President Suma Chakrabarti in a speech at the Foreign Investors Council earlier this month.

“We at the European Bank for Reconstruction and Development are already increasing our involvement in agriculture and we certainly want to do more to reform the sector and to increase its role in the economy,” he said. The EBRD President also argued for a larger role in the sector for both foreign and domestic private investors.

The Bank has also increased its banking team in Kazakhstan in order to boost work in the sector and is preparing to launch a country-wide Advice for Agribusiness programme.

Kazakhstan has strong potential for growing oilseeds and producing vegetable oils, but most production equipment is outdated. Savola Foods will introduce new technologies and improve its operating efficiency as part of the EBRD-financed project.

The EBRD is the largest financial investor in Kazakhstan outside the oil and gas sector. Diversification of the economy away from reliance on fossil fuels, including the development of agriculture, is a number one priority for the Bank’s strategy in Kazakhstan. Increasing food security by promoting sustainable agriculture is one of the EBRD’s overall strategic goals.