LONDON, ENGLAND — The European Bank for Reconstruction and Development (EBRD) announced on March 14 that it is supporting the expansion of intra-regional trade in Arab countries by teaming up with the Arab Trade Financing Program (ATFP).
Under the agreement, the ATFP will be able to co-finance with the EBRD in a selected number of issuing banks under the EBRD’s Trade Facilitation Program (TFP) in Egypt and other southern and eastern Mediterranean countries. Guarantees will be issued to confirming banks involved in cross-border transactions supporting their payment obligations, thus expanding their capacity to engage in intra-regional trade and subsequently increasing the trade finance availability for local companies in Egypt and other Arab countries.
EBRD President Sir Suma Chakrabarti signed the agreement and said: “We are very pleased to welcome the ATFP as a partner of the EBRD’s TFP. This will undoubtedly help to extend support to local clients to promote intra-regional trade flows. Increasing trade will contribute to the overall economic growth in North Africa and the Arab countries.”
Abdulrahman A. Al Hamidy, chief executive chairman of the board of the ATFP, said, “The EBRD is a pioneer in trade financing with its Trade Facilitation Program. Through our agreement we will be able to enlarge our product range and guarantee the obligations of national banking institutions in their trade finance operations.”
Launched in 1999, the TFP aims to promote foreign trade to, from and among the EBRD’s countries of operations. Under the program, the EBRD not only provides guarantees to international confirming banks, but also grants short-term loans to select banks and factoring companies for on-lending to local exporters, importers and distributors.
The TFP currently includes over 100 partner banks in 23 countries where the bank invests, with limits exceeding €1.5 billion in total, and more than 800 confirming banks worldwide.