30374 - GTLP RMB Trade Asset Facility

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Summary of Investment Information

Project Number

30374

Company Name

GTLP RTAF Standard Chartered Bank

Date SPI Disclosed

May 10, 2012

Country

China

Region

East Asia and the Pacific

Projected Board Date

Jun 14, 2012

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Nov 30, 2016

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Jun 14, 2012
Signed : Dec 12, 2013
Invested : May 2, 2014

Sector

Commercial Banking - Risk Mgmt Facility

Project Description

The proposed project involves a funded risk participation of up to US$250 million where IFC with support from bilateral and multilateral organizations, and governments and government/development agencies (collectively the “Program Partners”) will participate in a portfolio of up to $500 million in eligible RMB trade assets originated by multiple Chinese issuing banks (mostly private sector) and confirmed or discounted by Standard Chartered Bank (“SCB”). This Project will cover eligible import and export trade transactions between China and mostly other emerging markets (the “Project”), with a two-year maturity and one year renewal option.

The proposed project is a direct fit with IFC China strategy of facilitating trade and investments between China and emerging markets, supporting SMEs by providing exporters and importers from developing countries, a new currency option to manage their trade flows and promoting South-South collaborations. The project is part of IFC’s Global Trade Liquidity Program (“GTLP”) and seeks to broaden the scope and impact of the program while contributing to developing a strong mitigation mechanism to current and future disruptions to trade finance stemming from currency volatility and availability.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	250.0
Equity

Development Impact

The Project is expected to have strong development impacts. First, it will contribute to the development of more market driven solutions for RMB-based trade settlement, with a stronger focus on small private sector Chinese banks (importer-side) and emerging markets (exporter-side). Second, it will contribute to increasing currency availability and reducing volatility risks in international trade, especially at times of crisis like the ongoing Euro-zone crisis, by diversifying the options available to both importers and exporters. Finally, the Project will help attract other global players to the RMB-based trade settlement markets with emerging markets.

IFC''s additionality in the Project lies in: (i) the strength of IFC''s trade finance programs including the GTFP and the GTLP programs; (ii) IFC''s investment experience in China''s financial markets; and (iii) IFC''s strong partnerships with potential Program Partners and other global financial institutions that places it in a unique position to contribute to the sustainable development of the RMB-based trade finance markets.

E&S Category Rationale / Risks and Mitigation

The project entails IFC’s funded risk participation of up to US$250 million backed by up to US$150 million unfunded risk sharing by the Program Partners in a portfolio of eligible RMB trade assets originated by Chinese banks and confirmed or discounted by SCB. The overall risk related to this trade finance support is considered to be low. The project has therefore been categorized as FI-3 in accordance with IFC’s Environmental and Social Review Procedure. The agreement with SCB will specify that the underlying goods to the transaction meet the requirements of the IFC Trade Exclusion List. IFC will review the trade portfolio and verify its compliance with the Exclusion List.

Contacts

For Inquiries About the Project, Contact

Mr. Rohit PrasadDirector & Global Account Manager, Development Organizations, The Americas1095 Avenues of the Americas, New York NY 10036
Telephone: +1-212-667-0337
Fax: +1-646-455-6337

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