Ecobank Transnational Incorporated and the African Development Bank (AfDB) have signed a US$ 200 million Trade Finance Facility. The facility, comprising two components, will support approximately US$1.8 billion of trade transactions in Africa over a period of three and a half years.
The components of the facility are a US$100 million unfunded risk-sharing facility to bolster Ecobank's capacity as an international confirming bank for trade transactions originated by issuing banks in Africa and another US$100 million trade facilitation loan which will be used by Ecobank to provide trade finance support to local corporates and SMEs in Africa. Mr Albert Essien, Ecobank's Group Chief Executive, signed for Ecobank while Mr Alex Rugamba, Director, AfDB signed for the AfDB.
According to a release issued by Ecobank, Mr Essien said the facility would greatly support international and intra-regional trade in Africa, adding that Ecobank looked forward to an ever-deepening collaboration with the AfDB to provide vital trade finance support to promote regional integration and the development of SMEs across Africa.
In another development, Ecobank and eleni LLC, the leading proponent and developer of commodity exchanges in Africa, have joined forces to strengthen Africa's agricultural financing capabilities when they signed a Memorandum of Understanding (MOU), with a view to establishing a co-operative framework to promote and accelerate the development of Africa's agriculture.
Mr Albert Essien, Ecobank's Group Chief Executive, signed for Ecobank while and Dr Eleni Gabre-Madhin, Chief Executive Officer of eleni, signed for eleni.
The signatures were appended at the AfDB's Annual General Meeting in Kigali, Rwanda, yesterday.
According to a release issued in Kigali, the partnership between Ecobank and eleni aimed to realize a shared vision of transforming Africa's competitiveness in global commodity markets, enhance value addition and processing in the domestic economy and food security.
The release said the partnership would build on the synergies between Ecobank's unrivalled pan-African presence and its commitment to financial inclusion, and eleni's successful track record of creating and operating commodity exchanges in Africa, with projects in Ghana, Cameroon, Mozambique, and Nigeria. Mr Essien, the release said, noted that Instruments such as warehouse receipts reduced uncertainty and improved access to finance across the value chain. "As well as increasing market transparency and reducing transaction costs, commodity exchanges play a crucial role in the monitoring and assessment of risk," Ecobank's Group CEO said, adding that Ecobank looked forward to collaborating further with eleni to enhance Africa's agricultural financing capabilities, according to the release.
For his part, the release said, Dr Gabre-Madhin said eleni LLC was very excited to be working with one of Africa's leading financial institutions, with a solid pan-African focus, as this would open up a tremendous opportunity to establish the leading platform for commodity-related payments and transactions across the continent.