AfDB Signs US$400M Risk Participation Facility with Standard Chartered
To support trade flows of approximately US$3.6 billion in Africa
Marrakech, 29 May 2013 – The African Development Bank (“AfDB”) and Standard Chartered Bank (“Standard Chartered”) today signed a US$400 million Risk Participation Agreement that will provide significant trade finance support for imports and exports across vital economic sectors including agriculture and food to corporate and financial institution clients in Africa.
This is the first time AfDB signed such bilateral risk sharing partnership with a bank. The three-year facility will support trade flows of approximately US$3.6 billion in intermediate and finished goods, raw materials and equipment in Africa. The programme aims to support economic growth, to foster development of the financial sector and to promote regional integration.
The facility involves an unfunded risk participation of US$200 million, where Standard Chartered will match AfDB’s undertaking in every transaction, bringing the total maximum portfolio to US$400 million. The facility is established based on a 50/50 risk sharing agreement.
Speaking at the ceremony, Tim Turner, Director AfDB Private Sector Operations said: “The majority of African banks have small capital bases, which constrain their ability to obtain adequate trade finance limits from international banks and to undertake sizeable transactions that have significant development impact. Through our risk sharing facility with Standard Chartered, the programme will bolster the trade finance capacity of banks in Africa, and in turn, expand trade and regional economic integration.”
Ebenezer Essoka, Chief Executive Officer for Southern Africa at Standard Chartered signed the agreement with AfDB at their annual general meeting held in Marrakech of Morocco. Ebenezer commented, “We are delighted to be partnering with the AfDB for this risk-sharing programme, which will support a significant increase in the availability of trade finance in more than 20 countries in Africa, thereby creating jobs and sustaining economic growth. Global trade is the lifeblood of the world economy and Standard Chartered is committed to supporting the growth of trade flows across our footprint markets in Asia, Africa and the Middle East. This partnership further strengthens our ability to serve the African market.”
Africa’s share of global trade is forecast to more than double by 2050. As a leader in trade finance, Standard Chartered promotes trade across Africa where the Bank has operations in 15 markets, and where Standard Chartered facilitates over US$10 billion of trade annually. AfDB Trade Finance program aims at supporting over US $10 billion volume of trade over the next 4 years.
Stay with Sierra Express Media, for your trusted place in news!
© 2013, https:. All rights reserved.