The newly-launched Eastern and Southern African Trade Fund is looking to raise up to US$1bn to support intra-African trade finance transactions.

The fund, set up in December last year, is being managed by Mauritius-based Eastern and Southern African Trade Advisers Limited (ESATAL), which is jointly owned and managed by multilateral development bank PTA Bank and private investment advisory firm GML Capital.

As yet, the fund has not received any investments, but GTR understands that the first closing – of US$150mn – is likely to happen in the next couple of months. “We are in the process of finalising all the legal contracts and agreements with the relevant stakeholders,” Yogesh Gokool, head of international banking at AfrAsia, tells GTR. AfrAsia is acting as the cash custodian of the fund in Mauritius, responsible for, among other things, cash and treasury management.

The Mauritius-domiciled fund is open-ended and will soon be inviting subscriptions from international investors.

Set up to provide trade finance support to exporters and importers in PTA Bank’s 18 African member states, the fund will only support intra-Africa trade and “will try to foster and address the trade finance deficit in the Comesa countries”, explains Gokool. It will target both the private and public sector.

At this stage no trade finance transactions have been identified. “There is a pipeline,” says Gokool, “but this will need to be approved by the investment managers and the board of the fund before any investment takes place.”

Admassu Tadesse, president of PTA Bank said in a statement issued by the bank last year: “This fund will make a significant contribution towards addressing the trade financing deficit in Eastern and Southern Africa, and will, through blending and leveraging regional, international, private and public sources of capital, facilitate regional trade and economic integration, in line with the mandate of PTA Bank.”