The Board of Directors of the African Development Bank (AfDB) Group has approved an unfunded $75 million trade finance Risk Participation Agreement facility for FirstRand Bank Limited (FRB).
The approved facility will enhance FRB’s ability to underwrite trade finance transactions originating from issuing banks in several countries, including transition states and low-income countries across Africa.
A news report from African Press Organisation (APO) on the deal indicates that it is estimated that when fully utilized, this RPA facility, will support approximately $500-600 million of trade over the next 3 years, of which more than $100 million will support intra-African trade and exports.
The facility will support sectors like agriculture, manufacturing, energy and retail trade, which is consistent with the AfDB Group’s goals of ensuring that Africa industrializes, is able to feed herself, and the living standards of its people are significantly improved. The facility is also an enabler to achieving the UN Sustainable Development Goals.
In presenting the project to the Board, the Bank’s Financial Sector Development Director, Stefan Nalletamby, said, “This facility, premised on a strategic credit-risk sharing mechanism, will help to promote inclusive economic growth in Africa’s low-income countries through increased facilitation of multi-sectoral import-export activities of local corporates and SMEs.
“It will also increase intra-Africa trade and regional financial integration in line with the Bank’s Hi5 strategic objectives”, Nalletamby added.
