US Exim and the Eastern and Southern African Trade and Development Bank (PTA Bank) have signed a memorandum of understanding (MOU) to boost exports to Sub-Saharan Africa.
Under the MOU, options will be explored for using up to US$100mn in US Exim bank medium and long-term loan guarantees and/or direct loans to finance US exports to the region, targeting both diaspora businesses in the US and PTA Bank’s member states.
“By engaging diaspora-owned businesses, the arrangement will help US companies capitalise on unique opportunities abroad and support jobs here at home while contributing to the development of sub-Saharan Africa,” says US Exim chairman and president Fred Hochberg.
The MOU was signed at a conference hosted by the US Chamber of Commerce called “Unlocking Growth in Africa: how the Diaspora can partner with the public and private sectors in the US and Africa”, aligning with the ‘US Strategy Toward sub-Saharan Africa’, adopted by the White House, which focuses on growth in the region.
US Exim has authorised more than US$4bn in financing for US exports to Sub-Saharan Africa in the past four years. A record 188 transactions totalling US$604mn were approved to facilitate exports in the region in 2013 alone.
US Exim and PTA Bank have joined on a number of transactions in recent years to boost trade finance and US exports to Africa. In 2011 US Exim guaranteed a US$60mn loan extended by HSBC to PTA Bank that financed the sale of American aircraft to Rwanda’s RwandaAir Express.
“PTA Bank has been growing its financing by about 30% per annum, of which close to half has gone into energy and infrastructure, with the renewable sub-sector a beneficiary,” says president and chief executive Admassu Tadesse.
“In the past two years, we have co-financed several independent power producers in various countries. We are keen on furthering our financing of infrastructure and power development, and are looking forward to expanded financial cooperation with long-standing partners such as US Exim bank among others,” he adds.