Johannesburg, South Africa, February 4, 2011 --
IFC, a member of the World Bank Group, and the Commonwealth Development Corporation (CDC Group), said today they would extend a trade finance facility of up to $125 million to Germany’s Commerzbank AG, which will use the guarantee financing to support cross-border trade in Africa, promoting economic growth on the continent.
IFC will invest in Commerzbank through an unfunded, risk-participation guarantee instrument on a portfolio of trade transactions. The CDC Group will provide IFC a counter guarantee of up to $50 million to support this guarantee investment.
Commerzbank will match IFC’s guarantee to create a $250 million facility that will support short-term trade across a number of sectors in Africa. These funds are expected to support up to $1 billion in trade finance transactions over a two-year period through Commerzbank’s network of emerging-market issuing banks in Africa.
IFC’s Director: Short Term Finance, Georgina Baker, said, “Promoting trade is an important part of IFC's strategy to support the private sector in Africa. By extending this trade finance facility, IFC is demonstrating its commitment to increasing Africa’s share of global trade and helping the flow of consumer goods, machinery, commodities, and other items across the continent.”
Christof Gabriel Maetze, Member of the Executive Board and Global Head of Financial Institutions of Commerzbank, said, "Commerzbank is a global leader in trade finance for Africa, working with more than 500 banks on the continent. Its experience with African trade is outstanding. This excellent basis enables Commerzbank to broaden and deepen its relationship with African banks and the IFC facility fits perfectly into our African growth strategy. We have already partnered with IFC on the Global Trade Liquidity and Global Trade Finance Programs and worked well with this world-class, multilateral financial institution."
This is IFC’s second trade finance facility with Commerzbank AG. The first funded risk participation guarantee instrument was signed in November 2009 for up to US$125 million, with the support of IFC and the Government of Canada.
IFC’s Global Trade Liquidity Program is a global initiative that brings together governments, development finance institutions, and private sector banks to support trade in developing markets and address the shortage of trade finance following the global financial crisis.
GTLP launched in May 2009, channeling much-needed funds to back trade in developing countries. Through the program, IFC provides guarantee coverage of bank risk in emerging markets, allowing recipients to expand their trade finance transactions within an extensive network of countries and banks and to enhance their trade finance coverage. As of January 19, 2011, the GTLP had disbursed $1.7 billion to seven program banks worldwide, supporting $11 billion in trade.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries. We create opportunity for people to escape poverty and improve their lives. We do so by providing financing to help businesses employ more people and supply essential services, by mobilizing capital from others, and by delivering advisory services to ensure sustainable development. In a time of global economic uncertainty, our new investments climbed to a record $18 billion in fiscal 2010. For more information, visit
www.ifc.org
.
About Commerzbank
Commerzbank is the leading bank for private and corporate clients in Germany. With the segments Private Clients, Mittelstandsbank, Corporates & Markets, Central & Eastern Europe as well as Asset Based Finance, the bank offers its customers an attractive product portfolio, and is a strong partner for the export-oriented SME sector in Germany and worldwide. With a total of some 1,200 branches, Commerzbank has the densest network of branches among German private banks. It has above 60 sites in more than 50 countries and serves approximately 14 million private clients as well as 1 million business and corporate clients. In 2009, it posted gross revenues of EUR 10.9 billion with some 63,000 employees.
