ITFC signs $1.1 billion trade financing deal with Afreximbank, others

23 Apr 2019
Financial Nigeria


ITFC’s $500 million agreement with Afreximbank will finance the Arab-Africa Trade Finance and Promotion Programme and boost trade cooperation between African and Arab countries.

Benedict Oramah, President, African Export–Import Bank

The International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank (IsDB) Group, said on Tuesday it has signed six trade financing and development agreements worth $1.1 billion with the African Export-Import Bank (Afreximbank), Moroccan Investment and Export Development Agency (AMDIE), Mali, Niger, Kyrgyz Republic and the Republic of Suriname.

The trade agreements were signed at the 44th IsDB Annual Meeting in Marrakech, Morocco. The framework of the agreements will provide state and private sector financing as well as capacity building programmes for export and small and medium enterprise (SME) development initiatives. Its targets are high-growth industries, including agricultural commodities, energy commodities such as crude oil, agricultural inputs, medical supplies, construction materials, metals and livestock.

ITFC’s agreement with Afreximbank, valued at $500 million, will finance the Arab-Africa Trade Finance and Promotion Programme (AATFPP) and boost trade cooperation between African and Arab countries. Key features of the AATFPP include financing facilities, integrated trade solutions to support SMEs, joint capacity building programmes, market access support and trade facilitation as well as technical cooperation.

A new agreement was signed with AMDIE to strengthen the trade development efforts in Morocco and across the wider Africa region. The MoU will foster export-led economic growth between Morocco and key African Organisation of Islamic Cooperation (OIC) members.

According to ITFC, an agreement worth $300 million was signed with the Republic of Mali. ITFC will mobilize financing from international and regional banks and financial institutions to be channelled towards imports of energy products such as crude oil and refined petroleum products, exports of agricultural commodities, and imports of agricultural inputs and foodstuff. The agreement will also cover lines of financing to local banks to boost the SMEs sector.

“The signing of these framework agreements represents major strategic steps in ITFC’s efforts to develop sustainable value chains and enhance trade between OIC countries and across the South-South corridor,” said Hani Salem Sonbol, CEO of ITFC. “They have been formed through careful alignment with national development strategies in member-countries to support economic diversification and job creation policies.”

The five-year $80 million agreement signed with Republic of Niger aims to aid socio-economic development through the provision of finance to SMEs and boost trade links between the Niger and other OIC member-countries. The provision of financing in the country will support a new food security programme and a new operation with the country’s national power company to import electricity and petroleum products.

According to the statement, ITFC’s agreement with the Republic of Suriname and Kyrgyz Republic are trade development solutions for new markets. A three-year agreement worth $150 million was signed with Kyrgyz Republic. The agreement covers the provision of a line of financing to local financial providers to support the private sector as well as provision of financing to the government of Kyrgyz Republic to fund strategic commodities.

Similarly, a three-year agreement was signed with the Republic of Suriname. Under the terms of the agreement, ITFC will mobilize up to $75 million financing for SMEs, exports and local banks.

Since 2008, ITFC has provided more than $45 billion of trade financing to OIC member-countries, making it the leading provider of trade solutions to these countries’ needs.

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