The EBRD is expanding its activities under the Trade Facilitation Programme in Uzbekistan with a US$5mn guarantee facility to Uzjilsberbank. The facility will be used for guarantees to cover Uzjilsberbank’s trade-related obligations to private sector clients.

Uzjilsberbank is one of Uzbekistan’s top five banks and the EBRD’s most recent partner bank and a new participant in TFP. Active in private sector development, the bank also received a US$5mn credit line in May 2004 under the EBRD’s Japan-Uzbekistan Small Business Programme for lending to private micro and small enterprises in Uzbekistan.

The deal is part of the EBRD’s Trade Facilitation Programme, initiated in 1999 to support trade to, from and within the bank’s 27 countries of operations. The EBRD guarantees payment obligations of local issuing banks to their western confirming counterparts in respect of trade-finance instruments.

The programme enables trade which otherwise could not be realised. Examples are the export of Lithuanian butter to Uzbekistan, the sale of Italian pasta-making equipment to Siberia and the delivery of wheat from Kazakhstan to Madeira. Most transactions are between small and medium-seized enterprises, enhancing job creation and inter-regional cooperation.

In 2003, the programme had its best year so far, with business volume growing by 26% to €467mn. More than 80 issuing banks in the EBRD’s countries of operations participate in the programme, with limits exceeding €600mn, while more than 500 confirming banks have joined TFP worldwide.