IFC and Bladex have signed a risk-sharing facility of up to US$350mn to expand access to trade finance for agribusinesses in Latin America and contribute to regional food security.

IFC and Bladex will each contribute up to US$175mn to the funded facility under the IFC Critical Commodities Finance Programme. The facility portfolio will consist of trade and commodity-related transactions, including short-term, pre-export and post-import financings, originated by Bladex through its network of corporate clients.

The facility will provide financing over three years for the production, processing and trade of commodities in nine countries across Latin America.

By ensuring the availability of commodity finance, IFC and Bladex will promote household food security by reducing the risk of shortages and maintaining stable prices for buyers. The financing will similarly assist firms in the agricultural supply chain in taking advantage of new opportunities and expanding their market footprint, creating jobs and driving economic growth.

“We are very pleased to have entered into this partnership agreement with the IFC to continue to service better our corporate clients. This agreement reinforces Bladex’s leading role in the corporate financing area in Latin America, as the bank continues to identify and offer new funding options to our corporate clients,” says Ulysses Marciano, chief commercial officer of Bladex. “Working with real sector clients along the trade value chain gives us a sustainable competitive advantage in developing new products tailored to local financing needs.”

Georgina Baker, IFC global head of trade and supply chain solutions, adds: “IFC’s risk participation will provide liquidity for Bladex to scale up its commodity trade finance operations and fill a critical gap in Latin America’s agricultural sector. Moreover, the improved availability of credit will help increase intra-regional trade, which creates an avenue for much-needed export-led growth in the region.”

The IFC Critical Commodities Finance Programme works through financial institutions to help reduce the risk of food and energy shortages in emerging markets, improving food security for the world’s poorest – who tend to be hit hardest by rising food and energy prices.

Since 2012, the programme has supported more than US$12bn in emerging market trade.