In 2020, the World Bank Group’s Multilateral Investment Guarantee Agency (MIGA) and the Eastern and Southern African Trade and Development Bank (TDB) signed a first-of-its-kind credit enhancement facility providing a 10-year EUR 359 million guarantee for commercial bank financing extended to TDB for trade finance, with longer tenors and lower interest rates.
In December 2023, MIGA and TDB expanded their cooperation, with MIGA issuing an additional EUR 349 million 7-year guarantee for a loan provided by Standard Chartered Bank (SCB) as agent on behalf of a syndicate of banks, including Citibank as arranger.
The TDB-MIGA partnership has so far succeeded in supporting transactions worth over USD 300 million in TDB member states, making it possible for their corporates, financial institutions, and public sector to import and export commodities which are vital to their food and energy security, industry, foreign exchange earnings, employment, and tax revenues, as well as medical equipment.
In context where financial institutions are more risk adverse than usual due to the current macroeconomic environment, and where international correspondent banks have accelerated their retreat from their continent, the guarantees are contributing to addressing the trade finance gap, which is estimated at between USD 100 and USD 120 billion in Africa.[1]
“We are very pleased to continue broadening our partnership with MIGA with this facility, as part of a string of strategic and impactful engagements between TDB Group and World Bank Group institutions. We are proud to be working together to help grow and transform our region’s economies through innovative trade finance solutions – important catalysts to our sustainable development” said Admassu Tadesse, TDB Group President and Managing Director. “
“MIGA is expanding its footprint in sub-Saharan Africa by supporting trusted partners like TDB,” said Hiroshi Matano, MIGA Executive Vice President. “Our trade finance guarantees offer a crucial instrument for attracting foreign direct investment, providing access to liquidity for low- and middle- income countries.”
“Multilateral development bank offering continues to be a key for our export finance solutions,” said Sujithav Sarangi, Executive Director, Structured Export Finance, Standard Chartered Bank. “This important finance backing from MIGA helps us to provide capital to TDB to foster trade across important footprint markets in sub-Saharan Africa.”