The International Islamic Trade Finance Corporation (ITFC) has signed a US$1.5bn deal with the Republic of Maldives to finance trade initiatives across two key Maldivian industries.
The five-year agreement will aim to boost the country’s fuel sector, while also providing trade solutions for its fishing industry. Specifically, ITFC will look to combine trade development initiatives with transactional financing to support local fishing communities.
The deal will also hope to enable ITFC to develop value chains within the country through trade financing and programmes which target these sectors.
At present, ITFC, a member of the Islamic Development Bank Group, finances around 80% of Maldivian energy imports through the State Trading Organization.
“The stable supply of fuel and fuel products is a critical economic growth component for Maldives, particularly in the facilitation of trade and import/export activity as well as to sustain energy generation for the country,” says chief executive officer of ITFC, Hani Salem Sonbol – who was appointed to his position in 2016.
He says that ITFC is boosting its ties with Maldives by diversifying into other sectors such as fishing, and adding trade development components to its offerings. “This high-level framework agreement reflects ITFC’s commitment towards supporting sustainable development in Maldives, whilst also promoting regional connectivity through the flow of intra-OIC trade.”
Since its inception in 2008, ITFC has provided more than US$45bn of trade financing to Organisation of Islamic Cooperation (OIC) member countries – of which there are 56.
The news follows ITFC signing six trade finance and development agreements worth more than US$1.1bn in April. Through the deals, the ITFC will provide state and private sector financing as well as capacity building programmes for export and SME development initiatives. The contracts will target high-growth industries including agricultural and energy commodities.
The biggest of the six deals was signed with the African Export-Import Bank (Afreximbank). The Arab-Africa Trade Finance and Promotion Programme (AATFPP), worth US$500mn, will include financing facilities, integrated trade solutions to support SMEs, joint capacity building programmes, market access support and technical co-operation to boost trade between African and Arab nations.