The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) has agreed to provide insurance cover to a new syndicated financing deal, which is expected to bolster exports from Arab countries to the West Africa region.
Last week, the ICIEC said it would extend US$50mn in insurance cover to the Arab Bank for Economic Development in Africa (Badea) in support of a wider financing arrangement.
A spokesperson from the Islamic Development Bank Group (IsDB), of which ICIEC is a member, tells GTR that the syndicated agreement will see Badea, the International Islamic Trade Finance Corporation and BMCE Bank of Africa provide a total of US$115mn to the Ecowas Bank for Investment and Development (EBID).
The spokesperson adds that the deal will support the export of strategic goods such as fertilisers from Arab countries to West Africa.
ICIEC’s support comes in the form of an Islamic bank master policy (BMP) and, according to a statement, this is the first time the IsDB member has provided such support to a multilateral development bank.
“The catalytic impact of the larger syndication is one of the main driving factors behind ICIEC’s participation,” says Oussama Kaissi, CEO of the ICIEC.
“ICIEC and Badea’s involvement has increased the availability of financing to EBID, to not only facilitate the importation of strategic goods to ECOWAS countries, but also support the business and growth of Arab exporters,” he adds.
While the release doesn’t mention the specific Arab states the agreement will boost exports from, Badea is a multilateral development bank owned by 18 Arab countries.
For its part, ICIEC works to boost trade between member countries of the Organisation of Islamic Cooperation through sharia-compliant investment and export credit solutions.
Amid the disruption caused by the pandemic, GTR reported in May 2020 that the ICIEC would put US$150mn towards a wider IsDB Covid-19 relief plan.
In a bid to mitigate the impact of Covid-19 on trade, the funds were earmarked for sustaining imports of strategic commodities, investment protection, and to minimise volatility.