Paris, December 14, 2023: IFC and Proparco today signed a risk-sharing agreement covering a package of trade finance operations worth a joint USD 200 million. As part of this deal, Proparco will now participate up to 50% in certain GTFP (Guaranteed Trade Finance Program) exposures of IFC, on the African continent. The first phase of this operation is aimed in particular at strengthening food security in a number of countries in Africa. In a second phase, Proparco and IFC will extend their joint action to other regions of the continent. The initiative could ultimately mobilize 500 million dollars.
This initiative is part of the Alliance for Entrepreneurship in Africa, in which Proparco and IFC are joining forces to provide a concrete response to the challenges of food security in Africa, while at the same time supporting the development of African SMEs, a decisive vector for economic growth and job creation. To achieve these two key objectives for the continent's resilience - given the significant deficit in trade finance in Africa - trade finance tools appear to be an effective lever, particularly in these inflationary times.
The partnership also includes a training component designed specifically for SMEs to enable them better to use the trade finance tools essential to the secure development of their import/export activities. A second component is dedicated to consolidating banks' practices in the fight against money laundering and the financing of terrorism, a key issue for IFC and Proparco.
The Alliance for Entrepreneurship in Africa (AforE) is a group of African, European, multilateral and bilateral institutions set up to support the private sector, entrepreneurship and the development of small and medium-sized enterprises (SMEs) across the continent, in order to promote the development of dynamic, competitive and inclusive economies. AforE focuses on four priorities:
- Supporting innovative and pioneering MSMEs with financial and technical services;
- Increasing the capacity of entrepreneurs to access finance, launch and scale ventures;
- Promoting innovation and inclusive economic growth;
- Working with public sector partners to improve the business climate and support reforms that create new markets for sectors with high-growth potential.
This project is also in line with the priorities set by Proparco as part of its 2023-2027 strategy "Acting together for greater impact", one of the three cornerstones of which is to support the resilience of local economies in the most vulnerable contexts.
Sérgio Pimenta, IFC Vice President for Africa, said: "The signing of today's agreement between IFC and Proparco, part of our ongoing collaboration in the context of the Alliance for Entrepreneurship in Africa, marks a significant milestone in our joint efforts to address the trade finance gap in Africa. This project will have positive impacts on the development of African exporters and importers and their potential to create jobs, contribute to economic growth, and ensure food security on the continent."
Françoise Lombard, Chief Executive Officer of Proparco, said: "We are very pleased to be partnering with IFC, a leading provider of trade finance guarantees. This operation is in line with the goals of the Alliance for Entrepreneurship in Africa, as it will make it easier for SMEs to import essential goods and basic foodstuffs into Nigeria and Madagascar".
About Proparco
Proparco, a subsidiary of Agence Française de Développement Group, has been working with the private sector for over 45 years for a more just and sustainable world. With an international network of 23 local offices, Proparco works closely with its partners to build sustainable solutions in response to environmental and social challenges in Africa, the Middle East, Asia and Latin America. Proparco benefits from sector-based expertise as well as a wide range of financial solutions tailored to the different stages of business development, notably thanks to its Digital Africa subsidiary, and its Propulse technical assistance offering designed to scale up the impacts and performance of its partners. Proparco's new "Acting together for greater impact" Strategy 2023-2027 enables, strengthens and amplifies the different ways in which it works with its partners. To learn more: http://www.proparco.fr/en/strategy.
For more information, go to: http://www.proparco.fr/en and @Proparco LinkedIn
About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
About the Alliance for Entrepreneurship in Africa
The Alliance for Entrepreneurship in Africa is an international, project-driven platform aimed at boosting the development of private sector participation and entrepreneurship in Africa with the goal of promoting dynamic, competitive, and inclusive economies across the continent.
For more information, please visit the Alliance website: www.alliance4e.org
