The African Development Bank Group’s Board of Directors approved an unfunded $75 million trade finance Risk Participation Agreement facility for FirstRand Bank Limited (FRB). The approved facility will improve FRB’s ability to underwrite trade finance transactions originated by issuing banks in a number of African countries, including transition states and low-income countries.
When fully utilised, it is estimated that this RPA facility will support approximately $500-600 million in trade over the next three years, with more than $100 million supporting intra-African trade and exports. The facility will support sectors such as agriculture, manufacturing, energy, and retail trade, which aligns with the African Development Bank Group’s goals of ensuring that Africa industrialises, can feed itself, and is self-sufficient and its people’s living standards have significantly improved. The facility also contributes to the achievement of the UN Sustainable Development Goals.
“This facility, premised on a strategic credit-risk sharing mechanism, will help to promote inclusive economic growth in Africa’s low-income countries through increased facilitation of multi-sectoral import-export activities of local corporates and SMEs,” said the Bank’s Financial Sector Development Director, Stefan Nalletamby, in presenting the project to the Board. It will also boost intra-Africa trade and regional financial integration, in line with the Hi5 strategic objectives of the Bank.”
