StanChart finances East African trade

Tanzania’s Export Trading Group (ETG) has secured a US$120mn syndicated 364-day revolving credit facility via mandated lead arranger Standard Chartered to finance the import and export of soft commodities.

The loan is split into a US$20mn overdraft facility and a US$100mn commodity-collateral facility.

Both the IFC and the OPEC Fund for International Development (OFID) join Standard Chartered in the syndicate.

The financing will be used across a number of African soft commodity markets in Tanzania, Zambia, Kenya, Malawi and Uganda, as well as expanding across to Indian soft commodity markets.

Speaking at the signing of the loan at Standard Chartered’s London offices on May 14, Anil Dua, head of origination and client coverage for Standard Chartered in Africa, says: “While Standard Chartered Bank, the IFC and OFID are three differenct agencies, I am delighted that we have managed to come to an agreement over a common purpose.

“While this is a one-year facility, it puts in place a structure which can then go on for the next couple of years until [ETG’s] needs change. The flow of commodities in and out of Africa has increased and another good thing about this transaction is that a lot of local, indigenous, East African parties will be able to grow from a regional player into a more global player. This will then be a good example to other regional traders across other parts of Africa as they begin to expand and become more ambitious.”

“This deal demonstrates Standard Chartered Bank’s commitment to the development of the agricultural sector across Africa by supporting the growth needs of our core clients,” he adds.

Mahesh Patel, chief executive officer and Ketan Patel, joint-managing director at ETG explain further to GTR: “There isn’t a commodity exchange in Africa, but in East Africa you can be sure that farmers know the daily price of their commodities through the internet and newspapers and such, and with Africa having the land space to provide commodities to Asia, you can be sure that the farmers will have plenty of markets to export their goods to.”