LONDON (Reuters) - Ukraine could unlock some $50 billion of collateral for lending to the country’s agricultural industry by overhauling its land legislation, Francis Malige, Managing Director at the European Bank for Reconstruction and Development (EBRD), said on Friday.
“Land reform is important, as financing for agriculture is severely constrained by the fact agribusiness cannot use land as collateral,” Malige told a Ukraine investment conference in London. “Lending on the basis of crops growing is not as powerful.”
Malige said there were around 45 million hectares of agricultural land in Ukraine and even by assigning a minimum value to it, that would provide “$40-50 billion of collateral you can put into the system”.
Kiev has been trying to push contested legislation through parliament, including raising the pension age and lifting a ban on land sales, as part of a $17.5 billion bailout agreed with the International Monetary Fund in 2015. The EBRD is the largest foreign investor in the country.
Reporting by Sujata Rao, writing by Karin Strohecker, editing by Nigel Stephenson