The International Finance Corporation (IFC) and Citi have launched a US$2bn supply chain finance agreement aimed at emerging markets, with an initial facility in Mexico.

The IFC, the financing arm of the World Bank, says the US$500mn Mexican deal is the largest project so far under its Global Supply Chain Finance (GSCF) programme, which was launched in 2022.

The GSCF initiative is the latest addition to the IFC’s suite of trade and supply chain finance programmes through which it partners with commercial lenders and fintechs to support financing in emerging markets. So far Absa and HSBC have also joined the programme, in addition to Citi.

The overarching deal between the IFC and Citi, signed on August 5, follows a pilot programme launched last year and will focus on extending sustainable supply chain finance in emerging markets.

An IFC spokesperson says the agreement with Citi includes a 50/50 funding split and that transactions supported by the deal must meet sustainable trade eligibility criteria recently released by the IFC and Asian Development Bank.

“We are pleased to partner with a market leader such as Citi on this groundbreaking programme,” says IFC global director of trade and supply chain finance Nathalie Louat. “The role of trade and supply chain finance in facilitating the goods and services essential for sustainability is paramount, and this programme will enable suppliers in Mexico, some of whom may not traditionally be considered bankable, to receive such financing.”

Mexico has been a focal point of the GSCF programme so far. Earlier this year the IFC inked a risk participation deal with HSBC for a US$200mn portfolio of supply chain finance assets in the country.

The IFC says it has also been providing advice in Mexico on the development of credit infrastructure and the introduction of products such as reverse factoring.

The organisation is in talks with other commercial lenders over participation in the GSCF programme, the spokesperson says.