The African Development Bank’s board of directors approved $50 million unfunded risk participation agreement with Commerzbank.
The new deal will leverage Commerzbank support to African issuing banks looking to expand their trade finance options.
It will also help address trade finance market demand in key economic sectors, such as agriculture and manufacturing.
According to the African Development Bank, the facility will foster financial sector development, regional integration, and boost government revenue generation.
This will be the African Development Bank’s second risk participation agreement with Commerzbank. The new deal will run for three years as a 50/50 risk-sharing agreement.
It is expected that the facility will support approximately $700 million (counting rollovers) of trade in Africa over the period.
Stefan Nalletamby, the African Development Bank financial sector development director, said: “Commerzbank is a strategic partner for implementing the Bank’s development mandate. This intervention will improve market access by African issuing banks, corporates and small to medium enterprises.”
