Agricultural Commodity Financing Program

complete

The Framework aims to provide financing to local agribusiness SMEs using commodities, normally represented by warehouse receipts, as collateral. In the Framework, the Bank aims to promote asset-backed commodity financing, standard in most market economies, which will help meet the working capital needs of the agribusiness sector in the Bank’s countries of operations. The framework will demonstrate a new cost-efficient method of working capital financing of the agribusiness sector throughout the Bank’s countries of operations. It will simplify the administration of loans and reinforce the legal surety of all parties involved in credit transactions. It will also improve the functioning of markets by reducing the seasonal fluctuations of commodity prices and will make markets more efficient and financing more economical by contributing to the development of the secondary market for warehouse receipts. The ultimate beneficiaries of the Framework will be local agribusiness SMEs. The Bank’s obligors may also be local banks if the funding to the ultimate borrowers is channelled through them. US$ 200 million (€233 million) Framework. To be determined on a case by case basis. Where the Bank is working through a local financial institution (FI), the FI will require that borrowers comply, at a minimum, with relevant local environmental standards for environment, health and safety, and do not engage in activities listed on the Bank’s Environmental Exclusion List. Where the Bank is lending directly to an agribusiness SME, due diligence will be conducted to ensure that the company complies with national and relevant EU standards or World Bank guidelines. TC funding will be needed in the future to raise awareness of warehouse receipts financing among local market players and may also be provided to assist with the implementation of the individual project under the framework.