The African Development Bank (AfDB) and the Eastern and Southern African Trade and Development Bank (TDB) has signed a Trade Finance Unfunded Risk Participation Agreement (RPA) in order to bolster intra-Africa trade, promote regional integration and contribute to the reduction of the trade finance gap
Agreed on the sidelines of the African Investment Forum in Rabat, Morocco, the US$150mn RPA facility is expected to provide guarantee cover of 50% and up to 75% for transactions in low-income countries (LICs) and transition states.
“TDB Group is delighted to strengthen its strategic partnership with the African Development Bank Group through tailored risk-sharing facilities aimed at scaling up trade finance,” remarked Wegoki Mugeni, TDB group chief operating officer in Nairobi. “This crucial support will help bridge the significant gaps in trade finance access as major international banks continue retreating from the continent.”
The facility is expected to support around US$1.8bn of trade over the next three years.
“We are delighted to work with TDB Group, a strong partner with extensive knowledge and network in Africa, on a shared ambition to support the region’s Trade,” commented AfDB director of the financial sector development department Attout Ahmed. “Supporting Trade in Africa is a key priority at the African Development Bank. Trade finance is an important driver of economic growth and is critical for cross-border trade particularly in emerging markets.”
Partners seek to bridge the gap in African trade finance
The facility is expected to support around US$1.8bn of trade over the next three years. (Image source: TBD)
