Washington, D.C., March 1, 2012—IFC,
a member of the World Bank Group, today announced a $2 billion initiative
to support critical trade flows in developing countries, which have experienced
a decline in the availability of trade finance as a result of the financial
IFC will invest up to $1 billion in the Critical Commodities Finance Program,
which is being launched to support the export and import of agricultural
commodities and inputs globally, and to facilitate imports of energy-related
goods in the world’s poorest countries. In addition, IFC has also announced
the extension of its successful Global Trade Liquidity Program, investing
an additional $1 billion in the program.
As its first investment under the Critical Commodities Finance Program,
IFC today disbursed $250 million for a facility with Societe Generale,
a Paris-based leader in commodity finance with a large customer network
in Sub-Saharan Africa and the Middle East.
The Critical Commodities Finance Program will help reduce the risk of food
and energy shortages, improving food security for the world’s poorest—who
tend to be hit hardest by rising food and energy prices. The program is
innovative because it uses a risk-sharing approach to extend financing
not only to banks but also to corporate clients of banks such as commodity
traders. The program is expected to set an example for other development
finance institutions, encouraging them to support agribusiness and energy
finance. It is expected to mobilize about $18 billion in funding over the
next three years.
“Many developing countries are vulnerable to food-supply shortages and
price spikes because of difficulties importing essential equipment, fuel,
and fertilizers,” said IFC Executive Vice President and CEO Lars Thunell.
“IFC’s Critical Commodities Finance Program will provide much-needed
support at a time when capital is becoming scarce for many businesses in
developing countries. It will also build on the success of our Global Trade
"We are proud to embark on this innovative program with IFC which
provides complementary liquidity and risk-sharing for soft commodities
and oil product financings to emerging markets,” said Federico Turegano,
Global Head of the Natural Resources and Energy Financing group at Societe
Generale Corporate & Investment Banking. “The initiative is aligned
with our longstanding presence in emerging countries, an integral part
of our comprehensive approach to serving the global commodities markets.
This program is also complementary to our commitment to a local and retail
banking presence in Africa."
Launched in 2009, the Global Trade Liquidity Program has helped support
about $20 billion in trade volume by channeling capital from more than
600 banks and development finance institutions at a time of global scarcity
in trade finance. The program was in the process of winding down, but has
been extended because of the recent deterioration of global financial markets.
Besides the $1 billion that IFC is investing, the Critical Commodities
Finance Program will seek to mobilize $1 billion from others, and an additional
$2 billion from commercial banks—for a portfolio that could reach $4 billion.
That portfolio is expected to support trade volumes of much as $18 billion
in emerging markets over the life of the program.
IFC, a member of the World Bank Group, is the largest global development
institution focused exclusively on the private sector. We help developing
countries achieve sustainable growth by financing investment, providing
advisory services to businesses and governments, and mobilizing capital
in the international financial markets. In fiscal 2011, amid economic uncertainty
across the globe, we helped our clients create jobs, strengthen environmental
performance, and contribute to their local communities—all while driving
our investments to an all-time high of nearly $19 billion. For more information,