WASHINGTON, July 1, 2020—IFC, a member
of the World Bank Group, and Citi have established an $800 million facility
to facilitate trade finance in emerging markets, supporting trade flows
in developing countries and helping businesses cope with the devastation
caused by the Coronavirus (COVID-19) pandemic.
The transaction, which is part of IFC’s
emergency response to COVID-19, will help to support the flow of critical
commodities in countries where businesses face financing challenges and
the disruption of cash flows due to the global outbreak of the virus. IFC
and Citi will share the risk in an $800 million portfolio of trade-related
assets on a 50-50 basis.
“Across the globe, the COVID-19 pandemic
is disrupting supply chains, decreasing demand, and causing overall market
anxiety. Many businesses—especially SMEs—are being forced to close their
doors,” said Paulo de Bolle, Global Director of IFC’s Financial Institutions
Group. “By rapidly increasing our capacity to deliver trade finance, IFC
and Citi can help businesses maintain their operations during the current
crisis and speed their recovery when the pandemic eases.“
“Supporting the sustainability of the supply
chains and stimulating the international trade flows have been a critical
priority for us as we deal with the impact of the COVID-19 pandemic. Citi’s
partnership with the IFC on this transaction will help enable the recovery
of trade flows in the emerging markets while aiding in mitigating the extended
disruption to the supply chains of many industries across the globe,”
said Ebru Pakcan, Global Head of Trade, Citi Treasury and Trade Solutions.
The signing marks the extension of an existing
facility under IFC’s Global Trade Liquidity Program, bringing the size
of the facility to $2 billion. Since the facility was created in 2009,
it has financed a total trade volume of $35 billion, with around $3.5 billion
in IDA countries (International Development Association, the World Bank
Group fund for the world’s poorest countries), and $13 billion in low-income
and lower middle-income countries. This long-standing partnership has facilitated
financing for 4,600 trade transactions through 185 banks in 48 emerging
Trade is considered a critical driver of
economic growth and trade finance is essential to the movement of goods
at all stages of the supply chain. Before the COVID-19 pandemic, the global
trade finance gap was an estimated $1.5 trillion in 2018.
On March 17, IFC’s Board of Directors approved
$8 billion in fast-track financing to help companies affected by the outbreak.
The bulk of that financing, including $2 billion for the Global Trade Liquidity
Program, will go to client banking institutions, enabling them to continue
to offer trade financing, working-capital support and medium-term financing
to private companies.
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work in more than 100 countries, using our
capital, expertise, and influence to create markets and opportunities in
developing countries. In fiscal year 2019, we invested more than $19 billion
in private companies and financial institutions in developing countries,
leveraging the power of the private sector to end extreme poverty and boost
shared prosperity. For more information, visit www.ifc.org.
Citi, the leading global bank, has approximately
200 million customer accounts and does business in more than 160 countries
and jurisdictions. Citi provides consumers, corporations, governments and
institutions with a broad range of financial products and services, including
consumer banking and credit, corporate and investment banking, securities
brokerage, transaction services, and wealth management.
Additional information may be found at http://www.citigroup.com
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