MIGA Facilitates Growth in Trade Finance Across Sub-Saharan Africa
WASHINGTON, February 29, 2024 – The Multilateral Investment Guarantee Agency of the World Bank (MIGA) issued a second guarantee of €349 million for a tenor of seven years to Standard Chartered Bank (SCB) of the United Kingdom as agent on behalf of a syndicate of banks, including Citibank as arranger, for its investments in Eastern and Southern African Trade and Development Bank (TDB). MIGA initially issued a 10-year guarantee of €358.9 million against the risk of non-honoring of financial obligations by a regional development bank in 2020.
The project is expected to help countries across sub-Saharan Africa in unlocking additional liquidity for essential trade finance transactions. This support is crucial for the region’s development, as many countries face tightening financing conditions. The project will support TDB’s trade finance operations by financing short-term in-land or cross-border trade. This includes using various financing instruments, such as short-term financing, structured transactions, and self-liquidating deals, to support specific trade transactions.
“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.”
TDB has historically supported countries going through severe debt and liquidity crises. The project will support financial stability and resilience by enabling the import of essential goods into countries struggling through crisis. It will help reduce liquidity constraints and other limitations in the regional market.
“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.
According to IFC’s research, the market gap for trade finance in sub-Saharan Africa is 9.1%, which is very high compared to other regions. MIGA’s guarantee is actively supporting TDB in promoting regional trade and integration, structural transformation, and economic development through trade finance services, project and infrastructure finance, and asset management.
“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.”
About MIGA
MIGA was created in 1988 as a member of the World Bank to promote foreign direct investment in emerging economies by helping to mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war and civil disturbance; and offering credit enhancement to private investors and lenders. Since its creation, MIGA has issued over $76 billion in guarantees across 123 developing countries, supporting more than 1,000 projects. Over the past decade, MIGA’s guarantees have generated more than 156,000 jobs in developing countries.
About Standard Chartered Bank
We are a leading international banking group, with a presence in 52 of the world’s most dynamic markets and serving clients in a further 64. Our purpose is to drive commerce and prosperity through our unique diversity, and our heritage and values are expressed in our brand promise, here for good. Standard Chartered PLC is listed on the London and Hong Kong Stock Exchanges. For more stories and expert opinions please visit Insights at sc.com. Follow Standard Chartered on Twitter, LinkedIn and Facebook.
About TDB
Established in 1985, the Eastern and Southern African Trade and Development Bank (TDB) is an investment-grade African regional development finance group, with the mandate to finance and foster trade, regional economic integration and sustainable development. With an asset base of USD 10 bn, TDB Group has 25 African member states, which alongside non-regional member countries and institutional investors from Africa, Europe and Asia, form TDB's community of shareholders.
TDB Group counts several subsidiaries and strategic business units including the Trade and Development Bank (TDB), TDB Group Asset Management (TAM), the Trade and Development Fund (TDF), TDB Captive Insurance Company (TCI), the ESATAL fund management company and TDB Academy.www.tdbgroup.org
Contact:
In Washington: Elizabeth Howton, (202) 458-5922 or ehowton@worldbankgroup.org
For more information, please visit: https://www.miga.org
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