IFC and Citi provide US$1.2 billion to support trade in emerging markets

IFC, a member of the World Bank Group, and Citi have agreed to develop a US$1.2 billion risk-sharing facility to help stimulate the growth of trade in emerging markets and to support economic development. IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, IFC works to help eliminate extreme poverty and boost shared prosperity.

The signing marks the extension of two existing facilities under the IFC Global Trade Liquidity Program. Citi was IFC’s first partner bank under the Global Trade Liquidity Program, a coordinated global initiative which was launched in 2009. Since its inception, these collaborative efforts have financed a total trade volume of US$20 billion, with around US$4.2 billion in International Development Association countries - which include Bangladesh and Indonesia - and US$7.1 billion in low income and lower middle-income countries. This long-standing partnership has facilitated financing for 3,368 trade transaction through 163 Emerging Market Issuing Banks in 40 countries, of which 23 are low and lower middle-income countries.

“Citi’s partnership with the IFC has been a tremendous success, helping to stimulate the recovery and growth of global trade in emerging markets," said Anurag Chaudhary, Global Head of Distribution for Citi’s Treasury and Trade Solutions. "Citi has been a trusted partner to banks, corporations and the public sector across the emerging markets for many decades, and through our collaboration with IFC – as well as other development and export credit agency partners around the globe – we are firmly committed to restoring the flow of trade and commerce financing around the world; and to helping emerging market economies play a more significant role within global trade."

The IFC Global Trade Liquidity Program works in partnership with global and regional banks with the goal of expanding the availability of trade credit at a time of global scarcity in trade finance. IFC announced an extension of the programme in 2012 to continue promoting international trade growth in emerging markets, including many of the world’s lowest income countries. The facility extension will expand the availability of trade credit for clients in emerging markets over a four-year span through a risk-sharing structure. IFC and partners will contribute US$600 million, and Citi will provide an additional US$600 million.

“As the availability of global trade finance continues to decline, IFC is committed to working with Citi to find innovative ways to help expand trade finance flows in the developing world – and the Global Trade Liquidity Program is one such successful effort,” said Marcos Brujis, IFC Director of Financial Institutions Group. “Citi has been one of IFC’s most dedicated partners in trade finance, and IFC looks forward to continuing this partnership to benefit SMEs and the emerging markets in which they operate.”

Citi will use the funding to originate and fund trade finance transactions in Africa, Asia, Central and Eastern Europe, Latin America, and the Middle East, enabling its bank clients to extend financing to local importers and exporters. The funding is expected to support emerging market trade flows of more than US$6 billion through 2019.

IFC issues US$100 million sukuk through IFC Sukuk Company

IFC, a member of the World Bank Group, announced earlier this month that it has issued US$100 million in trust certificates through a special purpose vehicle, IFC Sukuk Company, in an effort to spur growth in developing economies.

The five-year sukuk will support IFC's developmental financing activities in the Middle East and North Africa (MENA) and in other parts of the world. It will initially be listed on NASDAQ Dubai. An application has also been made to list the sukuk on the London Stock Exchange. The transaction will be IFC's second sukuk issuance.

“We are pleased to be part of this landmark sukuk issuance by IFC, which achieved the tightest pricing for a dollar-denominated sukuk. The issuance supports the growth of the Islamic finance and sukuk industry beyond its traditional borders,” said Ahsan Ali, Managing Director and Head of Islamic Origination at Standard Chartered Bank.

“As a non-Islamic multilateral, IFC's sukuk is expected to help deepen the sukuk market in the countries of the Gulf Cooperation Council, sending a positive signal for the development of the Gulf region's markets," said Mouayed Makhlouf, IFC Director for the Middle East and North Africa.

Bahar Alsharif, IFC Deputy Treasurer, said: “This issuance will help meet the funding needs of our private-sector clients in the Middle East and globally. As a premium global issuer, IFC is keen to offer international and regional investors high-quality alternatives in Islamic financial markets.”

IFC, an AAA-rated global financial institution, carried out its first Islamic finance investment in 1995, supporting a leasing project in Pakistan. To date, IFC has approved about 28 Islamic financing transactions worth a total of US$742 million.