The Eastern and Southern African Trade and Development Bank (TDB) has signed a US$50mn unfunded risk-sharing agreement with the Opec Fund for International Development (OFID) as part of plans to improve access to trade finance in Eastern and Southern Africa.
Under the terms of the deal, OFID will guarantee trade finance instruments issued by TDB partner institutions to fund the trade of commodities, which TDB says is especially important during the current Covid-19 pandemic, which has brought about new liquidity needs and other challenges.
“With this agreement, we are delighted to elevate our partnership yet again with the Opec Fund, one of our valued institutional shareholders since 2018,” says Admassu Tadesse, president of TDB. “In the past five years, TDB’s trade finance portfolio has grown two-fold to US$3.3bn thanks to our growing partnerships with like-minded financial institutions such as the Opec Fund, with which we continue to extend access to affordable finance to advance trade and sustainable development impact”.
The risk-sharing transaction follows a co-operation agreement signed between OFID and TDB in December last year to promote the socio-economic development of the private sector in TDB’s member countries. This came after OFID became a shareholder of TDB in 2018 with an investment of US$20mn. The total financing between both institutions has now reached US$250mn.
June 10, 2020