The Eurasian Development Bank (EDB) has opened a trade finance facility with Kazakhstan’s Tsesnabank.

The five year renewable loan facility totals US$5mn and will be used to finance foreign trade transactions of EDB clients in its member states. The facility can be drawn in rubles, euro, US dollars or the currencies of the CIS countries.

Since Tsesnabank has a strong agricultural focus, the finance is expected to fund a series of transactions in this space.

Madina Kassymbayeva, head of financial institutions lending division at the EDB, tells GTR that the transaction will help stimulate trade finance across the region. She says: “Due to the features of this transaction, 80% of the credit line will be utilised by projects from the EDB region – Kazakhstan, Russia, Belarus, Kyrgyzstan, Tajikistan and Armenia. Therefore, we expect that around US$3.2mn will be invested in trade between these countries, which in turn will – due to the multiplier effect – possibly create jobs and stimulate the development of companies involved in regional trade.”

Kassymbayeva explains that there are two benefits to using a multi-currency drawdown facility. She says: “First, the borrowers can be financed in the same currency they finance their suppliers (which eliminates currency risk); second, currencies are priced differently, which allows borrowers to select the most appropriate interest rates.”