Ukraine asks the EU for €220 million to unlock €4 billion in farm loans as Russia’s port strikes choke exports

Ukraine has requested €220 million from the EU to unlock €4 billion in agricultural loans as Russia's port strikes hinder exports, Ukrinform reported on August 13. This plan relies on a proposed €220 million EU grant, according to Ukraine's Agriculture Ministry. Post-invasion, Ukraine reconstructed its maritime trade, with the Black Sea route accounting for about 92% of the country's grain and oilseed exports by 2025.

However, Russia's attacks on the Odesa ports have now reduced expected exports from 64.4 million tons in 2026/27 to a potential 29.6 million tons. The loan mechanism aims to cover the financial shortfall before the upcoming sowing season. EU and Norwegian diplomats, alongside representatives from the World Bank and the UN Food and Agriculture Organization, joined Ukraine in drafting the plan through the Ukraine Facility and EU guarantee institutions.

The target approval period is within the coming weeks, before storage usage peaks in the fall. The grant, though not yet approved, is designed to subsidize interest rates and mitigate bank lending risks via the "5-7-9%" affordable-loan program. Despite seeking new export routes, Ukraine estimates that alternative Baltic ports might only handle 2.9 million tons monthly, falling short of the monthly target of 5.4 million tons.

Ukraine's loan strategy intends to generate €4 billion in agricultural loans with annual rates under 10%, with each euro of grant potentially mobilizing over €18 in lending. Additionally, Ukraine has adjusted minimum export price coefficients to offset increased logistics costs. As of November, a storage shortfall of 11 million tons of crops could emerge, with over €10.8 billion ($12.4 billion) in unsold stocks.