The African Development Bank (AfDB), Citi and the International Finance Corporation (IFC) have extended their previous revolving credit facility to improve the availability of trade finance in Africa.

The US$175mn three-year financing is part of the Global Trade Liquidity Programme (GTLP), launched by IFC in July 2009, and will provide banks in low-income countries across Africa with capital to on-lend to importers and exporters.

The financing will follow on from the banks’ previous transaction in September 2010. Citi tells GTR that the new and “enhanced” agreement has a slightly different structure to the previous transaction to allow more trade flows across Europe, as well as Africa and the US.

As part of the agreement, Citi will originate US$175mn in trade finance transactions from 125 financial institutions across 32 countries in Africa. IFC and AfDB will jointly fund US$70mn of the portfolio balance to provide additional liquidity while local institutions, in turn, will extend trade financing to importers and exporters.

The short-term revolving nature of the assets financed under the programme are expected to raise up to US$700mn in trade financing, Citi says in a statement.

However, Citi could not disclose the pricing details of the loan when contacted by GTR.

“While the impact of the crisis is felt throughout the global economy, the poorest are often those who are most affected by reduced growth, incomes and increased prices of critical goods,” Georgina Baker, director of trade and supply chain at the IFC says.

Citi economists expect Africa to more than double its share of world trade from 3% in 2010 to 7% in 2050.