The International Finance Corporation (IFC) and Rabobank have launched a US$500mn facility to increase commodity trade in developing countries.
Each will contribute US$250mn to the three-year risk-sharing facility – the second under the IFC Critical Commodities Finance Programme. It will benefit 200 emerging market financial institutions and corporates, including agribusinesses, in Rabobank’s global client network, with a focus on Asia and Latin America.
Sema Zeyneloglu, global head of financial institutions, emerging markets, at Rabobank, says: “Rabobank is delighted to have concluded the Critical Commodities Finance Programme, which we see as an attractive new tool to assist us in financing commodity flows to and from emerging markets for our key corporate clients.
“The programme supports not only emerging market financial institutions, but also directly targets corporations and traders involved in commodity finance. By moving the process further downstream to the end-users of the funds, the programme captures an extended part of the relevant chain, which should make it highly effective in supporting our business.”
IFC vice-president for global industries Rashad Kaldany adds: “This partnership between IFC and Rabobank will help channel additional working capital to emerging market firms to expand their commodities production and trade and foster economic growth in many of the world’s poorest countries.”
Launched in 2012 , the Critical Commodities Finance Programme is meant to reduce the risk of food and energy shortages in emerging markets, using a risk-sharing approach to extend financing to banks and corporate clients of banks such as commodity traders. A first US$250mn loan was extended to Société Générale in February, and the IFC expects the programme to mobilise about US$18bn in funding through 2014.
IFC launches commodities initiative