EBRD to help Ukraine find an exit for its exports

The European Bank for Reconstruction and Development (EBRD) is considering financial support for Ukraine’s transport and logistics companies to help them maintain their exports, a senior bank official said on Thursday.

Ukraine last week formally closed its four Black Sea and Azov Sea ports, which Russian forces have captured, leaving land routes through neighbouring countries as its only export option.

It consequently risks losing millions of tonnes of grain exports due to Russia’s control of Black Sea shipping, triggering a food crisis and inflationary pressure on global food commodities markets.

The EBRD plans to offer a liquidity line to Ukraine’s rail company UZ to keep it running and prepare it to export more Ukrainian goods, EBRD’s eastern Europe head Matteo Patrone told Reuters at the bank’s annual meetings in Marrakech.

“We are working with logistics companies to see how to support them on liquidity lines,” he said.

The initiative includes Ukraine’s post office and other companies in the private and public sectors, as well as municipalities, he added.

Talks between EBRD and Ukraine’s infrastructure ministry are looking at ways to upgrade transborder and transhipment infrastructure, Patrone said.

A trader said rail could only export a fraction of the grain currently stored in Ukraine’s silos, with the rail company needing to adapt its infrastructure and equipment for transborder grain shipments.

The Bank is also in the early stages of negotiating liquidity lines to help Ukraine’s neighbouring countries deal with Russia’s gas supply halt, Patrone said, without giving details.

“We are also discussing with Naftogas the provision of a liquidity line to them,” Patrone said.

The EBRD has said it intends to spend 1 billion euros ($1.04 billion) in 2022 to help the Ukrainian economy.

European Union Commissioner for Trade Valdis Dombrovskis estimated the cost of war damage to Ukraine at between 500 billion and 600 billion euros.