MULTINATIONAL - First Rand Bank SA (FRB) - Risk Participation Agreement Facility (RPA III)

The proposed facility is a Risk Participation Agreement (RPA) for FirstRand Bank Limited (FRB). It aims to share the default risk on a portfolio of eligible trade finance instruments originated by African issuing banks (IBs) and confirmed by FRB. The proposed facility will help address the critical market demand for trade finance in Africa by supporting trade in various vital economic sectors such as agriculture, energy, manufacturing, and construction. In addition, the project will promote intra-Africa trade and regional integration as it is expected to finance at least USD 150 million in intra-Africa trade. By using a facility threshold of USD1 million as a proxy of SME transactions, it is envisaged that at least 68% of total transactions supported will be for the benefit of SMEs over the next 3 years. Ultimately, the facility would facilitate the importation of critical capital goods, agricultural inputs, foodstuffs, and post-COVID – 19 related medical supplies and support SMEs in the RMCs involved in wholesale and retail trade. The project primarily contributes to climate adaptation results. As such, 50% of the total approved amount is attributed as climate finance, of which 38 million USD is dedicated to adaptation.