The UniCredit Group, the World Bank’s IFC, KfW Ipex-Bank of Germany, South Africa’s Nedbank Capital and Northstar Trade Finance of Canada have joined forces to set up a joint platform which aims to boost global export finance.
The project, named global export finance limited (GEFL), will be a specialised platform that will serve as a cooperation vehicle for medium to long-term export finance transactions backed by export credit agencies (ECAs).
Global export finance has been severely affected by the current economic crisis, with the falling demand in goods combining with the squeeze in liquidity to lead to the largest drop in volume for decades. This initiative aims to combat the crisis in trade finance through combining the expertise and market access of commercial banks with the guarantee instruments of ECAs and the resources and support of the IFC.
GEFL will work with commercial banks and ECAs to expand export volumes by engaging local banks, promoting the use of local currency, and broadening the number of emerging market companies able to participate in ECA financing.
A memorandum of understanding between the project partners was signed during the UniCredit East Forum, which took place in Rome on June 25.
In a joint statement, the project partners confirmed that this initiative reflects a commitment to restore exporters’ confidence in an area that has been particularly affected by the current economic crisis, and also reaffirms the leading role of GEFL partners in supporting trade and export finance in emerging markets.
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