London, September 10, 2010—IFC,
a member of the World Bank Group, Citigroup, and the African Development
Bank agreed to provide up to $300 million in trade financing for exporters
and importers in Africa to help boost economic growth.
The financing is part of the Global
Trade Liquidity Program, a public-private partnership launched in July
2009 to support trade in developing markets and address the shortage of
trade finance following the global financial crisis.
Under the transaction, Citigroup will
originate a portfolio of up to $300 million in trade finance transactions
from banks across Africa, focusing on low-income countries. The local
banks, in turn, will extend trade financing to importers and exporters.
IFC and AfDB will jointly fund up to 40 percent of the portfolio
to provide Citigroup with additional liquidity. The short-term, revolving
nature of the assets financed could mean a total impact of up to $1.5 billion
in trade financing.
“The innovative structure of this transaction
will significantly increase the supply of trade finance in Africa, helping
create jobs and boost economic growth at a time when the region is still
facing a severe credit shortage,” said Lars Thunell, IFC Executive Vice
President and CEO.
The transaction, part of a larger strategy
to transform trade finance in Africa, addresses increased demand in the
“Citigroup is delighted to join IFC
and AfDB to help expand trade in Africa. The nature of the public-private
partnership promotes investment in sectors such as agriculture that are
vital to the African economy,” said John Ahearn, Head of Global Trade
of Citigroup. “Our global reach and expertise in capital markets and trade
flows ideally positions us to provide financial services to support trade
in African economies.”
Donald Kaberuka, President of the African
Development Bank, said, “The market situation for trade finance, by and
large, had been improving since the beginning of the financial crisis—although
that assessment should be mitigated, particularly regarding low income
and weak economies in Africa. This joint program will address these
needs and expand AfDB’s role as a development institution. It will
allow us to have a broader impact by promoting trade, one of the cornerstones
of development in Africa.”
IFC, a member of the World Bank Group,
is the largest global development institution focused on the private sector
in developing countries. We create opportunity for people to escape poverty
and improve their lives. We do so by providing financing to help businesses
employ more people and supply essential services, by mobilizing capital
from others, and by delivering advisory services to ensure sustainable
development. In a time of global economic uncertainty, our new investments
climbed to a record $18 billion in fiscal 2010. For more information, visit
For more information about the African
Development Bank, visit www.afdb.org.
For more information about Citigroup,