Stages of the cooperation between Fund and Customer for finansing encouragement
The daily management of Agro Ukraine is performed by SustainAgri Ukraine.
1. Meeting between the parties regarding
- The customer informs about project plans and strategies.
- The customer informs about ownership of building and land, rent of land and buildings etc.
- SustainAgri Ukraine informs about possibilities for financing through Agro Ukraine and the related requirements. Memorandum of Understanding is detailed.
2. Signing of protocol of intentions
3. The customer submits all relevant material to Agro Ukraine regarding the project, ownership, available environmental and building permits and - if available - financial annual reports for the latest 3 years etc.
4. From the Danish Contractor responsible for the project implementation, Agro Ukraine receives further information about the project, based on the Danish Contractors visit to project site and discussion with the customer. The information should include assessment of location of farm and whether it is possible for the customer to obtain the necessary permits for establishment and operation of the project, an assessment of existing manure handling and storage facilities, the need for establishment of new manure storage facilities and an assessment whether existing buildings are suitable for renovation or the project is based on new buildings. The Danish contractor also submits to Agro Ukraine technical detail and cost estimate for the proposed project after the project proposal has been submitted and discussed with the customer.
5. Based on the information received during the introduction meeting, information received from the Danish Contractor, Agro Ukraine prepares and submits a recommendation letter to the customer whether Agro Ukraine, based on the preliminary investigations, consider the project viable and is offering the customer to enter into a Memorandum of Understanding.
6. The customer submits proper documentation, that he can provide the remaining 35 % self financing of the project investment and the necessary operational capital.
7. The parties sign Memorandum of Understanding in case the customer and Agro Ukraine agree on the terms and conditions.
8. The Board of Directors of Agro Ukraine will based on a recommendation from the management of Agro Ukraine make an assessment of the project. Approval in Principle will be given within a month from signing of Memorandum of Understanding in case the project is approved by the board. In case Approval in Principle is not given, the customer is no longer bound by the Memorandum Of Understanding.
9. The customer has to pay 0.5% -1% of the total project investment to Agro Ukraine within 7 days from signature of the Approval in Principle by board of Directors of Agro Ukraine.
10. SustainAgri Ukraine elaborates in cooperation with the customer:
- Draft technical project description and renovation plan with cost estimate.
- Outline management agreement with cost estimate
- Outline breeding plan with demand for breeding stock for starting production and later supply of breeding stock and semen. Cost estimate will be included.
- Business Plan study including calculation of total investment for purchase of buildings and land, investment in renovation of buildings and infrastructure, purchase of breeding stock, management support cost, necessary working capital, budget for 5 years med profit estimate, balance, cash flow analysis, overview of financial and production key figures, sensitivity analysis for 3 years, production plans for 5 years, detailed budget for the first 2 years production etc.
- Environmental and animal welfare assessment of the project.
11. The customer is responsible for obtaining all necessary permits such as building permits, environmental permits, water intake permits etc. needed for the establishment and operation of the project. It also rest with the customer to prepare the Ukrainian Environmental Impact Assessment and other documentation needed for obtaining the permits.
The loan will be given on the condition that the customer obtain all necessary Ukrainian permits for establishment and operation of the project.
12. The final legal and financial assessment is made by international consultants and Agro Ukraine.
13. Board of Directors of Agro Ukraine makes final decision on approval of loan.
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