Mohamed Farag Amer and his family – the owners of Faragalla, a leading food producer in Egypt – are setting an example of how to contribute to a stronger, more competitive private sector in the region. The EBRD in 2015 extended a loan of 200 million Egyptian pounds (€23.4 million equivalent) to support the permanent working capital needs of Faragalla and expand their production activities, as well as boost exports to neighbouring countries.
Aside from providing financing, the EBRD and the EU’s Neighbourhood Investment Facility will fund technical cooperation (TC) activities to strengthen Faragalla’s corporate governance and improve their sales and marketing strategy. The donor community has been a key player here. By complementing investments it is helping to unlock the company’s enormous potential as one of the biggest fruit, vegetable and dairy producers in Egypt.
Reinforcing the role and competitiveness of the private sector
Over the past 25 years, the EBRD has invested around €10 billion through 577 projects in the agribusiness sector across 35 countries. TC projects have boosted the impact and scale of these investments. In 2015 alone, TC and policy dialogue activities in this sector received €7 million from the donor community, with major contributions from Japan, the Netherlands, the SEMED Multi-Donor Account, the Taiwanese International Cooperation and Development Fund and the Ukraine Multi-Donor Account.
Developing a more competitive agribusiness industry is also a way to strengthen global food security. Through our Private Sector for Food Security Initiative, we help connect every stakeholder along the food value chain for an inclusive and resilient agribusiness sector and we foster public-private dialogue to improve the investment environment. The Initiative boosts and streamlines the production of better quality food, while respecting the environment.
Improving the investment climate through policy dialogue and reforms
The EBRD facilitates public-private platforms in cooperation with the Food and Agriculture Organization (FAO) of the United Nations to ensure that public policies set the right incentives for private sector growth.
The Initiative targets market and sector gaps, from enhancing transparency in the grain market to creating export infrastructure in Kazakhstan. It also helps countries such as Serbia to improve the safety and quality of their food products and boost exports to the EU market.
Thanks to the Ukraine Multi-Donor Account funding, in 2015 we launched a partnership between the Ukrainian government and private companies to work on priority reforms. These focus on making firms more competitive through higher value-added products, simpler regulations and export diversification into new markets.
The EBRD also engages in improving import-efficiency in the Egyptian grain sector, with funding from the SEMED Multi-Donor Account. In this context, local firms, the Egyptian government and international experts came together in 2015 to talk about applicable phytosanitary standards and ways to reduce import-related expenditure and waste.
Increasing efficiency and productivity
Introducing new products and processes, applying the latest technology and disseminating know-how – these activities help enhance the efficiency and productivity of firms in the EBRD region. At the same time, these measures can increase the environmental sustainability of agribusiness investments.
In 2015, the EBRD provided a loan of 15 million Jordanian dinars (€19 million equivalent) to Jordanian poultry producer Al Jazeera to construct a new grain mill and improve the firm’s energy efficiency.
Thanks to a grant under the EBRD’s Finance and Technology Transfer Centre for Climate Change, which is supported by the Global Environment Facility, the company will introduce highly efficient heating systems. This will lower the use of diesel and provide better heating and ventilation while also cutting operational costs.
Innovation is essential for agribusiness growth, yet companies sometimes lack opportunities to tap into the latest knowledge. That is why, with funding from the Netherlands, the EBRD partnered with Wageningen University and Research Centre to launch the “Innovation for Agribusiness” programme for 2015-17. Leading experts will work with firms in Ukraine and the Western Balkans to upgrade food quality standards, adopt climate resilience technologies, enhance value chains and link more effectively with suppliers.
The EBRD will continue building partnerships with donors, investors and experts to improve the business climate for private agribusinesses from Morocco to Mongolia.
Like Faragalla, key agribusinesses play a vital part in the economy. Enabling such companies to unleash their full potential by becoming more competitive features high on the agenda of the EBRD and its donors.