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The EBRD is extending its Trade Facilitation Programme to a Turkmen bank, Senagat, with a guarantee facility of up to US$500,000. The line will be used exclusively to support private-sector transactions. Senagat is the first Turkmen bank in the Trade Facilitation Programme. Senagat focuses on the private sector and is among the most active partners of the EBRD under its SME development programme in Turkmenistan.
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. With the signing of Senagat in Turkmenistan, all the EBRD’s countries of operations requiring trade finance support are now represented in the programme.
TFP 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-sized 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.
Under TFP, training is provided to member banks to enhance trade finance skills. The EBRD has organised training courses financed by the governments of Austria, France and Ireland for more than 300 bankers from 65 banks in 15 countries. With support of the government of Switzerland, a similar training was conducted for over 20 bankers representing almost the entire banking sector of Turkmenistan in April 2004.