MK Group takes out loan from German Investment Corporation - EUR 50 million for energy efficiency in agriculture

(MK Group and DEG representatives signing the agreement)

MK Group has borrowed EUR 50 million to improve agricultural production and boost energy efficiency. This Serbian company has got a long-term loan from the German Investment Corporation (DEG) with co-financiers being the Dutch Development Bank (FMO) and the Austrian Development Bank (OeEB).

- Loan proceeds will mainly be invested in new equipment for getting sugar from molasses. We expect new technology to cut energy costs by approximately one fifth per tonne of sugar. Some of this money will be invested in a kiln for drying beet strips, a by-product of the sugar making process. This will significantly reduce the emission of carbon dioxide in the process of producing sugar – Miodrag Kostic, president of the MK Group, said Thursday at a press conference organized on the occasion of this company signing a loan agreement with DEG.

Kostic noted that loan proceeds would also be invested in the modernization of existing and the procurement of new irrigation systems, after which a total surface area covered by MK Group's irrigation systems would amount to about 5,000 hectares.

He also said that part of the money would be spent on the construction of network of silos, warehouses and points of purchase in Vojvodina.

When asked by eKapija when the announced investments would be implemented, the president of the MK Group replied:

- Preparation works for all these projects are already underway. We will do our best to make use of these funds as soon as possible. Hopefully, there will be no euro left from this loan by the summer 2014.

Peter Thimme, director of the German Investment Corporation for Europe, Near East and Central Asia, said that agriculture was one of the most important sectors they invested in, adding that DEG was investing EUR 6 billion annually in the agrarian sector.