Today, the U.S. Agency for International Development (USAID) announced new partnerships with Grain Alliance, Kernel, and Nibulon to help Ukraine overcome immediate and long-term export logistics challenges caused by Russia’s full-scale war and continue to provide much-needed grain to the global market. The combined investments exceed $44 million and are projected to increase grain shipping capacity by more than 3.35 million tons annually.
USAID facilitated the partnerships through the Agriculture Resilience Initiative – Ukraine (AGRI-Ukraine), the agency’s flagship effort to help Ukraine increase its capacity to produce, store, ship, and export grain despite Putin’s invasion. The war, most notably the Russian Federation’s months-long blockade of Black Sea ports from late February to August 2022, has drastically diminished Ukraine’s export capacity and left exports dependent on severely constrained rail capacity. Rail export, river, and other overland routes must be improved and expanded to avoid dependence on Black Sea ports and allow Ukraine to efficiently access regional markets.
These new transshipment investments will increase grain export operations at three terminals: Izmail and Reni, both on the Danube, and Čierna nad Tisou in Slovakia. The co-investments include $8 million from AGRI-Ukraine and more than $36 million from the three partners and will cover a range of expansion needs from design and construction, to renovate berths at the Reni port and to expand the Port of Izmail, to purchasing a transshipment storage facility in Slovakia including building silos and procuring transport equipment such as trucks and railcars. USAID will contribute through procuring grain loading equipment, temporary storage structures, and remanufactured locomotives.
BZK Grain Alliance AB has operated in Ukraine for more than 20 years, striving to restore Ukraine as the breadbasket of the world. Grain Alliance currently cultivates around 60,000 hectares as well as operates six grain elevators with a total drying and storage capacity of more than 300,000 tons. In May of 2022 Grain Alliance secured the Cierna nad Tisou transshipment facility in Slovakia to provide an uninterrupted route for Ukrainian producers to transport grain by rail. After the first successful shipment in June, by mid-December already 100,000 tons of grain have been shipped. The expansion will allow Grain Alliance to increase export volumes by more than 500,000 tons annually along this overland corridor.
Ukraine’s largest producer and exporter of sunflower oil and largest exporter of grain, Kernel’s integrated grain and oilseed value chain includes 363,000 leasehold hectares under farming, 3.5 million tons capacity for sunflower seed crushing, 2.3 million tons of storage capacity, and 10 million tons capacity at deep-water export terminals. In 2022, Kernel secured sunflower oil and meal transshipment capacities in the Ukrainian port Reni on the Danube River. During the summer, Kernel invested in barges, coasters, and handy-size carriers for grain and oil to make exports via the Danube River more efficient. This new investment in berth access will allow for a 600,000 tons per annum increase in volume.
Over the last 30 years, Ukraine’s Nibulon LLC has created a vertically integrated grain logistics infrastructure network that includes 80,000 hectares under cultivation and a total capacity of over 2.25 million tons storage. Nibulon employs 6,000 people and has invested more than $2.3 billion in the Ukrainian economy. This includes $600 million in a modern fleet of 82 vessels, currently blocked because of the Russian aggression. Their recent investments include the new Bessarabska branch transshipment terminal in Izmail, building on their 2009 expertise in using the Dnipro and the Southern Buh Rivers as transport waterways of Ukraine. With a carrying capacity of 300,000 tons per month, the terminal expansion will facilitate an additional 2 million tons of export annually.
Agriculture, the bedrock of the Ukrainian economy, accounts for nearly 20 percent of Ukraine’s GDP, 20 percent of the workforce, and more than 40 percent of total export revenues. The USAID-led AGRI-Ukraine initiative bolsters Ukrainian agricultural production and exports, supports Ukraine’s embattled economy, and alleviates the global food security crisis exacerbated by Putin’s brutal war on Ukraine. AGRI-Ukraine provides critical agricultural supplies, improves export rail logistics and efficiency, increases farmers’ access to finance, and supports storage, drying, and processing needs.
Through AGRI-Ukraine, USAID contributed $100 million, has leveraged more than $70 million, and seeks to leverage an additional $80 million, including from fellow donors, the private sector and foundations, with an overall investment target of $250 million. For more information on AGRI-Ukraine and how to partner with USAID to support Ukraine’s agriculture sector, visit the AGRI-Ukraine link: www.usaid.gov/ukraine/agriculture-resilience-initiative-agri-ukraine.