Germany’s Commerzbank has agreed to provide US$250mn to partner banks across Africa to finance short-term trade finance transactions.
This enables Commerzbank to broaden and deepen its relationship with African banks."
The funds will be on-lent to exporters and importers across a number of sectors including commodities and consumer goods.
The loan is expected to support up to US$1bn in trade finance transactions over two years.
Furthermore, up to half of Commerzbank’s money will be guaranteed by the IFC through an unfunded risk-participation guarantee product.
The IFC is also offsetting some of its risk through the UK’s Commonwealth Development Corporation, which is providing a counter guarantee of up to US$50mn.
“[Commerzbank’s] experience with African trade is outstanding,” says Christof Maetze, global head of financial institutions at Commerzbank.
“This excellent basis enables Commerzbank to broaden and deepen its relationship with African banks and the IFC facility fits perfectly into our African growth strategy.”
This is the second time that the German bank has partnered with the IFC for a trade finance facility.
The first was a November 2009 funded risk participation guarantee instrument which was also signed for US$125mn and came with the support of the Canadian government.
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