The European Bank for Reconstruction and Development (EBRD) is helping to strengthen the agribusiness sector in Egypt with a US$ 100 million equity investment in one of the country’s sugar refinery companies, which is also a subsidiary of Savola Group, one of the largest food groups in the Middle East and North Africa region.
The Bank will convert an existing US$ 50 million loan to United Sugar Company of Egypt S.A.E. (USCE) into equity and provide the company with an additional US$ 50 million in share capital.
The EBRD’s investment will support a privately owned and efficiently-run player in Egypt’s state-dominated sugar sector. The EBRD will also help USCE to improve its operational efficiency and competitiveness, as well as helping the company to enhance its health and environmental practices to meet international standards.
By converting the EBRD’s original loan into equity, USCE will strengthen its balance sheet and reduce its exposure to foreign currency-denominated debt.
The additional US$ 50 million in equity will be used to finance the company’s working capital, thus helping company’s exports and local sales in extremely tough market conditions.
Philip ter Woort, Director for Egypt, EBRD, said: “Through this expansion of our partnership with Savola Foods and United Sugar Company of Egypt, the EBRD is very pleased to provide ongoing support to an important foreign direct investor in Egypt whilst simultaneously demonstrating the positive role the private sector can play in developing an efficient and modern food value chain in the country.”
Tarek El Sherbini, Head of Agribusiness for the southern and eastern Mediterranean at the EBRD, said: “Savola Group has been a long-term partner of the EBRD since 2005 in Kazakhstan and then in Egypt, and this transaction marks another step in the expanded cooperation across common countries of operations. We are looking forward to continuing our strategic partnership with the Savola Group.”
The EBRD has invested over €1.6 billion in Egypt through 31 projects since the start of its activities in the country at the end of 2012. The Bank’s areas of investment include the financial sector, agribusiness, manufacturing and services as well as infrastructure projects such as power, municipal water and wastewater and contributions to the upgrade of transport services.