27839 - GTFP IV

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Summary of Proposed Investment

Project Number

27839

Company Name

Global Trade Finance Program

Date SPI Disclosed

Nov 14, 2008

Country

World Region

Industry

Financial Markets

Projected Board Date

Dec 18, 2008

Status

Pending Signing

Sector

Commercial Banking - Trade

Department

Global Industry, Financial Markets

Environmental Category

C - No Impact

Previous Events

Approved : Dec 18, 2008

Project Description

In response to the current financial crisis, an additional $1.5 billion for the Global Trade Finance Program ceiling supplementing the existing $1.5 billion initially approved by the Board in November 2004 (Investment No 23898, $500 million) and subsequently in January 2007 (Investment No. 25667, $500 million) and October 2008 (Investment No 27372, $500 million) allowing IFC to support trade finance up to a total amount of $3.0 billion on a revolving basis. This additional $1.5 billion will be subject to the same terms approved for Investments No. 23898, 25667 and 27372.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	1500.0
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. Since the inception of the Program in September 2005, $3.2 billion in trade guarantees have been issued to support 2,600 transactions of which 48% were for banks in Africa, 70% were SME transactions, 50% supported trade with IDA countries, and 35% 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 144 international commercial banks that act as confirming banks and serve as potential trading partners for the 132 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 and Latin America by providing capacity building of local banks through trade finance training - training courses have already been carried out in Senegal, Cameroon, Ghana, Kenya, Nigeria, Sierra Leone, Ethiopia, South Africa, Rwanda, Liberia, Nicaragua, Mexico, Haiti, Trinidad & Tobago, Mozambique, Peru, Tanzania, PNG and Bangladesh. Some 770 bankers from 49 countries have benefited from this focused training. Additionally, extended on-site advisory services have been carried out in Sierra Leone, Liberia, PNG, Nicaragua, Uganda, Haiti and Mongolia.

This is a Category C project according to IFC’s environmental policies .Each transaction will be supported by underlying documentation with the participating banks. Each agreement specifies that the underlying goods to the transaction will meet the requirements of the Corporation’s environmental exclusion. IFC will see the details of the underlying trade transaction, 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. A full listing of confirming banks and issuing banks is found on the GTFP website: http://www.ifc.org/gtfp

Ms. Bonnie Galat, Chief Trade Officer, Marketing and Distribution
Global Trade Finance Program
International Finance Corporation
2121 Pennsylvania Ave, NW, Washington, DC, 20433, USA

Telephone: 202-473-5335
E-mail: bgalat@ifc.org
Website: http://www.ifc.org/gtfp

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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.

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