25667 - GTFP II

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Summary of Proposed Investment

Project Number

25667

Company Name

Global Trade Finance Program

Date SPI Disclosed

Nov 21, 2006

Country

World Region

Industry

other

Projected Board Date

Jan 5, 2007

Status

Pending Signing

Sector

Trade Finance

Department

Global Industry, Financial Markets

Environmental Category

C - No Impact

Previous Events

Approved : Jan 11, 2007

Project Description

An additional $500 million Global Trade Finance Program ceiling supplementing the existing $500 million ceiling approved by the Board in November 2004 (Investment No. 23898), allowing IFC to support trade finance up to a total amount of $1 billion on a revolving basis. This additional $500 million will be subject to the same terms approved for Investment No. 23898. This is a global facility.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	500.0
Loan
Equity

Development Impact

The GTFP addresses the on-going demand from clients to receive multilateral support for trade. The inherent flexibility of the program to meet client demands globally and quickly enhances its impact. By guaranteeing trade transactions as small as $7,000 IFC lends critical support for the trade of consumer goods, intermediate goods, and smaller machinery, and commodities that are needed by the SME sector. In 14 months of operation, the program has issued US$527 million of guarantees to support 560 transactions of which 65% were for banks in Africa, 80% were SME transactions, 77% supported trade with frontier countries, and 36% facilitated south-south trade.

IFC is building a global network of partnerships among issuing banks and confirming banks that can tap risk mitigation for trade on an as-needed, per-transaction basis. The Program lends critical support to challenging and nascent markets, particularly the growing ‘south-south’ trade flows. The breadth and depth of the network is a key benefit to the participating banks in the Program, made up currently of 87 international commercial banks that act as confirming banks and serve as potential trading partners for the 42 local issuing banks in our client countries participating in the Program to date. The primary focus of the Program has been on the under-served markets in Africa. The training and TA component of the GTFP, aimed at institution building began in June 2006 and has already reached 90 bankers in 18 countries, primarily in Africa. The trade product has permitted IFC to engage for the first time in some of the most challenging, and post-conflict countries in Africa.

This is a category C project according to IFC’s environmental policies. Each transaction will be supported by underlying documentation with the participating banks. The agreements will specify that underlying goods to the transaction must meet the requirements of the Corporation’s environmental exclusion list. IFC will see the details of the underlying trade, as well, in the application received from the requesting bank.

Contacts

For Inquiries About the Project, Contact

Since this is a global facility, individual borrowers under the facility will be identified only after Board approval. Therefore, the client’s contact details are currently not available.

Bonnie Galat, Head, Trade Marketing GTFP
International Finance Corporation
Telephone: 202-473-5335
E-mail: bgalat@ifc.org

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This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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