ADB signs Uzbekistan firsts

The Asian Development Bank (ADB) has signed its first trade finance agreements in Uzbekistan.

The agreements, which aim to increase access to financing for cross-border trade through ADB’s trade finance facilitation programme (TFFP), were signed with Uzbekistan’s Agrobank, Asaka Bank and Hamkorbank.

Philip Erquiaga, director general of ADB’s private sector operations department, remarks: “The agreements under ADB’s TFFP will provide Uzbek companies with the financial support they need to buy and sell key components and final goods. More business means more jobs and higher incomes.”

As well as providing finance, the TFFP links banks and firms in ADB’s developing countries with their foreign counterparts, as Kazuhiko Higuchi, ADB’s country director in Uzbekistan, explains: “The trade finance agreements will bolster cooperation between banks and businesses in Uzbekistan as well as between firms in Uzbekistan and their business partners further afield.”

In 2009, the TFFP provided support for US$1.9bn in trade deals, an increase of 300% from the previous year, with a forecast of US$15bn in trade finance generated through 2013.
 
Steven Beck, head of trade finance at ADB, speaks to GTR about the agreement: “We are seeing strong demand for finance to support trade deals [in Uzbekistan]. Uzbekistan is a good example of a market where the private sector and multilateral development banks like ADB want to work closely to support the demand for transactions.

“ADB has hitherto not been as active in Central Asia as in other parts of Asia and the Pacific but we are now making a concerted effort to be more active in that part of the world. [Regarding the TFFP], demand for trade finance out of Central Asia has been huge and the problem is likely to be meeting the large, genuine demand for support for critical trade transactions. Our strategy of working closely with partners will help smooth our learning curve in this sub-region.”

Beck also explains that ADB has recently expanded in Azerbaijan and will sign agreements with banks in Tajikistan later this year, followed by Armenia, Georgia, Kazakhstan, Turkmenistan and Kyrgyzstan. He adds: “There is strong demand for trade finance in many parts of Central Asia so we expect to continue to steadily expand the scope our business in that part of the world as well as into south Caucasus.”