Access to Finance to Import Strategic Commodities Project

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This project aims to backstop the FX payment obligations of the main commercial banks in Burundi so that they facilitate the importation of critical commodities, particularly fertilizer and pharmaceuticals. Currently there is a severe shortage of Foreign Currency (FX) which prevents Burundi from importing essential goods for health and food security. Correspondent banks lack confidence to extend letter of credit (LC) lines to banks in Burundi due to the high-risk profile of local banks, which largely emanates from the country risk. The proposed facility will backstop the obligations of local banks vis a vis the confirming correspondent banks, should they fail to get access to FX to fulfill their payment obligations. In terms of financing instrument, the project will use an Investment Project Financing with a Deferred Drawdown Option (IPF-DDO). The IPF-DDO allows the World Bank to backstop FX transactions with contingent financing, and drawdowns only happen when pre-defined triggers are met.