JEDDAH, Kingdom of Saudi Arabia
The International Islamic Trade Finance Corporation (ITFC) has signed six major Trade Financing and Development Agreements worth in excess of US$1.1 Billion with Organisation of Islamic Cooperation (OIC) member countries including the Commonwealth of Independent States (CIS), MENA, South America and Sub-Saharan Africa regions.
The agreements were signed at the 44thIsDB Annual Meeting in Marrakech earlier this month.
The framework agreements, which provide state and private sector financing as well as capacity building programs for export and SME development initiatives, target high growth industries including agricultural commodities, energy commodities such as crude oil, agricultural inputs, medical supplies, construction materials, metals and livestock.
The ITFC CEO, Eng. Hani Salem Sonbol commented, “The signing of these framework agreements represent major strategic steps in ITFC’s efforts to develop sustainable value chains and enhance trade between OIC countries and across the South-South corridor. They have been formed through careful alignment with national development strategies in member countries to support economic diversification and job creation policies.”
In conjunction with the African Export-Import Bank (AFREXIMBANK) ITFC, signed trade agreements worth US$500 million, finances a comprehensive program, Arab-Africa-Trade Finance and Promotion Program (AATFPP) to boost trade cooperation between African and Arab Member Countries. The program aims to promote Arab-African economic integration by facilitating the expansion of trade and investment in African countries with Arab countries.
Key features of the AATFPP will include financing facilities, integrated trade solutions to support SMEs, joint capacity building programs, market access support and trade facilitation technical cooperation. The program has been developed within the framework of ITFC’s flagship Arab Africa Trade Bridges Program (AATB), conceived in 2017 in Morocco to drive intra-OC trade.
With Mali, the bank signed an agreement totalling up to US$300 million. 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 framework agreement will also cover lines of financing to local banks to boost the SMEs sector, as well as implementation of capacity building programs for the strategic sectors of the national economy.
A new MoU with the Moroccan Investment and Export Development Agency (AMDIE) will strengthen trade development efforts in the Kingdom of Morocco and across the wider African region. The agreement seeks to foster export-led economic growth between Morocco and key African OIC member nations in line with the Kingdom’s vision to build a robust export-led SME sector.
The signing of these framework agreements represent major strategic steps in ITFC’s efforts to develop sustainable value chains and enhance trade.
A US$80 million framework agreement with the Republic of Niger aims to aid socio-economic development through the provision of finance to SMEs and to boost trade links between the Republic of Niger and other OIC member countries. The agreement will support financing operations for the export of agricultural and livestock commodities. The provision of financing in Niger will also support a new food security program and a new operation with the Country’s national power company for the import of electricity and petroleum products.
Financing of local banks will support SMEs and the private sector, which also benefit from trade development related capacity-building programs to facilitate trade amongst women and youth entrepreneurs, to upgrade SMEs and train experts in international trade.
Trade Development Solutions for New Markets
Three Year Framework Agreement with the Kyrgyz Republic
A new 3-year framework agreement worth US$150 million underpins ITFC’s strategy to finance local institutions and boost trade links between the Kyrgyz Republic and other OIC countries.
The main areas of cooperation include the provision of a line of financing to local financial providers to support the private sector, in addition to the provision of financing to the Government of Kyrgyz Republic to fund strategic commodities. The financing will help to import essential commodities and products needed by the Government and will pave the way for a greater cooperation between the ITFC and the Kyrgyz Republic.
The framework agreement also provides scope for capacity-building programs, aimed at facilitating and promoting trade, with the objective of enhancing free trade and cooperation with the Kyrgyz Republic.
Three Year Framework Agreement with Suriname
ITFC’s framework agreement with the Republic of Suriname will see it mobilize up to US$75 million financing for SME’s, exports and lines of finance to local banks, in addition to a Murabaha agreement over three years to boost the import of essential goods.
The agreement directs funds from international and regional banks and financial institutions to support the import of goods such as agriculture input, fertilizers and medicines, in addition to the provision of pre-export financing for petroleum products. Furthermore, the framework mobilizes resources to local financial institutions in the Republic to support the private sector, with a specific focus on SMEs.