href=”http://www.afdb.org/”>African Development Bank (AfDB) Wednesday approved an unfunded $200-million Risk Participation Agreement (RPA) to facilitate Ecobank Transnational Incorporated’s (ETI) trade finance activities in Africa and provide finance for trade in vital African economic sectors such as agribusiness and manufacturing.
The first facility is a three-year unfunded Risk Participation Agreement (RPA) of $100 million 50/50 risk-sharing arrangement between AfDB and Ecobank through its subsidiary EBI S.A, will see ETI match the development agency’s undertaking in every transaction, thereby creating a maximum portfolio of up to $200 million.
The second facility is a 3.5-year trade facilitation loan of $100 million, which will be used by ETI subsidiaries to provide trade finance support to local corporates and SMEs in Africa
The development agency said in an official statement that “the majority of African banks have small capital bases which constrain their ability to obtain adequate trade limits from international confirming banks and to undertake sizeable transactions that have significant development impact” on the continent.
Ecobank said the deal will facilitate approximately $1.8 billion of trade in intermediate and finished goods, raw materials and equipment to support economic growth.
The $200-million Risk Participation Agreement (RPA) with SCB is in line with AfDB’s Regional Member Countries’ priorities to promote trade and in accordance with the African political objectives as reaffirmed during the 18th African Union Ordinary Session held in January 2012. It also aligns with the Bank’s Regional Integration Strategy, which seeks to consolidate the Bank’s engagement in trade finance in Africa.
Ecobank Transnational Incorporated is registered and headquartered in Lomé, Togo, as a pan-African bank holding company. It has presence in 32 African countries, and is represented in France through its affiliate, EBI S.A. Ecobank has representative offices in Beijing, China, Dubai, United Arab Emirates and the UK. Its shares are listed on the Ghana, Nigeria and BRVM (UEMOA) Stock Exchanges.