The European Bank for Reconstruction and Development (EBRD) has agreed to make $100m equity investment in Egypt-based United Sugar Company (USC), which is also a subsidiary of Savola Group, to strengthen the agribusiness sector in the country.
USC is considered as one of the largest food groups in the Middle East and North Africa region.
EBRD will convert an existing $50m loan to USC into equity and provide an additional $50m in share capital to the company.
With the conversion of the original loan into equity, USC will be able to reduce its exposure to foreign currency-denominated debt and also strengthen its balance sheet.
The additional $50m equity will be used to fund the company's working capital, thereby helping the company to boost exports and local sales in challenging market conditions.
The investment from the Bank is expected to improve USC's operational efficiency and competitiveness along with enhancing its health and environmental practices so as to meet the international standards.
EBRD Egypt Director Philip ter Woort 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."
EBRD southern and eastern Mediterranean agribusiness head Tarek El Sherbini 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 Bank has invested more than €1.6bn in Egypt through 31 projects since 2012.
Its area of investments include 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.
Image: EBRD provides funding for Egyptian sugar refinery company. Photo: Courtesy of Mister GC/FreeDigitalPhotos.net.
