The European Bank for Reconstruction and Development (EBRD) has loaned US$10.6M (€10M) to Ukrainian grain producer Grain Alliance Group to expand overland export capacity, World Grain reports.

The five-year loan will be used to improve and expand overland export capacity, in a bid to increase Ukraine’s grain shipments via land corridors following Russia’s blockade of Black Sea seaports, according to the 19 December report.

Russia’s war on Ukraine, which began on 24 February, had forced producers to seek road and rail routes to international markets rather than via ports, which have been blocked and damaged, World Grain wrote.

Three Ukrainian Black Sea ports restarted moving grain at the end of July under a deal – the Black Sea Grain Initiative – brokered by the United Nations and Turkey. The deal was renewed on 17 November for an additional 120 days.

At the time of the report, Ukraine had exported almost 18.1M tonnes of grain in 2022, which was down by almost 30% from the 25.8M tonnes exported by the same stage the previous year, the country’s agricultural ministry was quoted as saying.

Congestion on existing overland routes has limited exports, with investment needed to address border crossing bottlenecks, according to the report.

The Grain Alliance Group’s response has been to develop alternative logistics routes from Ukraine. The group acquired a grain logistics hub last year just over Ukraine’s border with Slovakia, in the city of Čierna nad Tisou.

The EBRD’s loan would fund an expansion of the Slovak hub to provide trans-shipment capacity of 400,000 tonnes/year, World Grain wrote. In addition, it would support the Grain Alliance Group’s efforts to increase storage capacity, upgrade and automate infrastructure, and buy grain hoppers, trains and trucks for the secure transport of grains from its Ukrainian elevators to the Slovak hub and onward.

The loan was in line with the Solidarity Lanes package, a programme established by the European Commission and EU-bordering countries to safeguard global food security and aid Ukraine’s economy, in which the EBRD was investing US$314M (€300M), the report said.

Grain Alliance Group is a Swedish-owned mid-sized agri-holding.