ABIDJAN, Ivory Coast, February 29, 2024 -/African Media Agency(AMA)/-The Board of Directors of the African Development Bank Group has approved a $150 million unfunded risk participation agreement between the African Development Bank and the Eastern and Southern African Trade and Development Bank (TDB).
This agreement aims to boost intra-African trade, promote regional integration and contribute to reducing the trade finance gap in Africa, in line with the objectives of the African Continental Free Trade Area (AfCFTA). (link is external)
The African Development Bank will provide guarantee coverage of 50%, and up to 75%, for transactions in low-income countries and states in transition, on a risk-sharing basis with TDB. This coverage will be provided to a number of eligible local and regional banks in the Common Market for Eastern and Southern Africa (COMESA) region that are active in trade finance. This facility is expected to support approximately $1.8 billion in trade over the next three years.
“Supporting trade in Africa is a key priority for the African Development Bank. Trade finance is an important driver of economic growth, it is essential for cross-border trade, particularly in emerging markets,” said Nwabufo Nnenna, the African Development Bank Managing Director for Africa. East. “We are delighted to work with TDB, a strong partner with in-depth knowledge and an extensive network in Africa, with the shared ambition to support the region’s trade,” she added.
The President and Managing Director of Trade and Development Bank, Admassu Tadesse, noted that the TDB Group was “very pleased to continue to build on its strategic partnership and tailored risk-sharing facilities with the African Bank Group. development in order to develop trade finance and other offers, in a region where large gaps persist in terms of access to trade finance, among others, and where large international banks are disengaging and reducing their appetite for risk. »
Distributed by African Media Agency (AMA) for the African Development Bank.
About the African Development Bank’s Unfunded Risk Participation Arrangement (RPA) : Unfunded APR is one of the trade finance instruments offered by the African Development Bank to support local banks in Africa. It is designed to provide eligible regional and international commercial banks and regional DFIs with partial risk coverage for their trade finance operations in Africa, with the African Development Bank typically bearing 50% of the risk. The Bank selects its business partners based on the size of their African portfolio, the extent of their coverage of the African market, their support for intra-African trade and the quality of credit approval processes.
The African Development Bank also offers local banks a three-year trade finance transaction guarantee facility to support the confirmation of their trade finance transactions.
Source : African Media Agency (AMA)
2024-02-29 16:55:25
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