Multinational - African Export-Import Bank (Afreximbank) - Risk Participation Agreement II

The project consists in granting: (i) a US $ 300 million trade finance credit line (CF LDC); and (ii) a risk-sharing agreement of US $ 150 million to finance the implementation of the medium-term strategy of the African Export-Import Bank (Afreximbank). The strategy focuses on the following main pillars: intra-African trade, industrialization and export development, and trade finance globally. The CF LDC will have a 4-year term, while the risk-sharing agreement should have a maturity of 3 years. Under the risk-sharing agreement, the Bank will guarantee up to 50% of the credit risk on a portfolio of trade finance transactions initiated by African issuing banks. Afreximbank will cover the risks for an amount greater than or equal to the Bank's contribution. The proposed facility will help address the severe shortage of trade finance in RMCs, due in part to falling commodity prices and shrinking foreign exchange reserves. It will strengthen regional integration and support intra-African trade.