With Kyrgyz Ineximbank’s issuance of a US$391,000 letter of credit to Russia’s Vneshtorgbank for the import of Russian Kamaztrucks by a Kyrgyz importer, the EBRD’s Trade Facilitation Programme reached its 4,000th transaction.

Established in 1999, the Trade Facilitation Programme supports trade to, from and within the EBRD’s 27 countries of operations. TFP assists participating banks in building track records with their correspondent confirming banks, reducing cash collateral requirements and freeing clients’ working capital by providing guarantees to the confirming banks in respect of the payment of various trade finance instruments issued by local banks. Since the start of the programme, TFP has guaranteed letters of credit from four Kyrgyz banks, confirmed by 16 foreign banks in 10 countries.

One goal of the programme is support for intra-regional trade, not only helping create jobs but also supporting the restoration of traditional trade links. Last year alone 150 such transactions were financed under TFP.

Transaction number 4,000 is a good example of the transition and graduation process promoted by the programme, says Rudolf Putz, TFP Operation Leader at the EBRD. While western banks have started to take risks on major issuing banks under the programme in Russia and Kazakhstan, banks in these countries have begun to use TFP also as confirming banks in intra-regional trade finance transactions with less advanced countries.

This year the programme is again on course for a new record in terms of completed transactions. In 2004, the best year so far, the number of transactions rose to 1,089 from 939 in 2003. The programme now includes more than 90 issuing banks in the region, with limits exceeding €1 billion in total, and about 500 confirming banks throughout the world.

The Trade Facilitation Programme is also an important tool in the EBRD’s initiative for Early Transition Countries to stimulate market activity in the Bank’s poorest countries of operations by using a streamlined approach to financing more and smaller projects.