EU Allocates €1 Bln for the Development of Export of UA Agroproducts

by Olha Povaliaieva
Monday, November 14, 2022
EU Allocates €1 Bln for the Development of Export of UA Agroproducts

Eurocommission, Czechia, Poland, Romania, Slovakia, Moldova, Ukraine, EIB, EBRD WB Group develop "Solidarity Lanes" financing system

Ukraine is one of the largest exporters of agricultural products in the world. Every year, our country exports around 45 million tons of agricultural products to different parts of the world. This year, Russia is blocking the Black sea ports — the main route for distributing Ukrainian grain to importing countries. While grain accumulates in Ukrainian elevators, the world's shortages are growing, prices are rising, and food security is collapsing.

On May 12, 2022, the European Commission and the states bordering Ukraine created solidarity lanes Ukraine-EU as an alternative for the export of Ukrainian agricultural products and other product groups. During this time, it was possible to take out about 15 million tons from Ukraine by roads, railways, and ports of the Danube. Thanks to this, the farmers and agricultural complexes of Ukraine could earn about €15 million, thus supporting the economy of the agricultural country. However, despite the titanic efforts of the EU (and separately by the neighbouring countries of Ukraine, Poland, Romania, Slovakia and Hungary) applied for the development of solidarity lanes, the capacity of these routes does not cover the external demand for Ukrainian agricultural products. In addition, so far this is the only way in which the country receives humanitarian aid and diverse support from partners.

The European Commission has attracted several public and national EU programs to maintain and develop solidarity lanes. Shortly, the European Commission and partner countries will allocate 250 million euros to cover urgent requests for the development of trade routes. In the medium term, €50 million from the Connecting Europe Facility will be realized.

The funds will be used to provide liquidity to investors, repair roads and vehicles, and increase the capacity of all funds involved in the Solidarity Lanes program. The EIB and EBRD will provide funds to implement Jaspers' technical expertise.

During 2022-23, the European Commission and other project participants will invest €300 million in the solidarity project. Part of the funds has already been allocated to individual projects that have already been approved or are under consideration.

"The World Bank Group, in addition to its regional transport modelling, rapid damage assessment to identify priority repairs and recovery investments as well as ongoing work on trade and logistics, is preparing an emergency project to undertake repairs of the railway and road infrastructure damaged by the war with up to USD 100 million targeted for disbursement in 2023. Rehabilitation of railway infrastructure and multi-modal logistics in Romania and the Republic of Moldova to Ukraine's borders is under discussion to support Ukrainian critical exports and imports and lay the foundations for reconstruction," Eurocommission.

The European Commission and the partner countries participating in the solidarity lanes project are coming to other states to finance the project aimed at ensuring the food security of applicants for EU membership Ukraine, Moldova, and the whole world.

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