The International Islamic Trade Finance Corporation (ITFC) has extended a US$100mn financing package to Turkish lender TKYB to support the working capital and trade financing needs of Turkey’s agriculture sector.

The deal is guaranteed by the Turkish Ministry of Treasury and Finance, and is structured in two tranches, a spokesperson for ITFC tells GTR.

One will provide working capital and trade finance to companies in the food and agriculture sectors and the other will be used to help companies impacted by the 2023 earthquake address their trade and working capital needs.

The deal is structured as a two-step murabaha, a form of shariah-compliant financing. It is based on a terms letter signed between the two institutions in 2023.

TKYB, the Development and Investment Bank of Türkiye, will be responsible for the utilisation and dissemination of funds.

Food security is a key area of focus for ITFC, according to its May Progress Report on Enhancing Intra-OIC Trade. In 2023 it approved US$2.18bn in disbursement for the food and agricultural sectors, 31% of its total. The report also notes, however, that much of the trade finance provided in this sector is for cash crops in Sub-Saharan Africa.

The new agreement follows a separate US$50mn financing agreement signed earlier this month with the Industrial Development Bank of Türkiye to support earthquake-stricken businesses.