The majority of African banks have small capital bases which constrain their ability to obtain adequate trade limits from international confirming banks and to undertake sizeable transactions that have significant development impact. Moreover, despite the growth in trade risk distribution globally, local banks in Africa have not significantly benefitted from this growth. AfDB's additionality lies in the use of its “AAA” rating to share trade risk and expand the trade finance capacity of banks in Africa, thereby expanding trade and strengthening regional integration.
This RPA facility, running over a 3-year period, is 50/50 risk sharing arrangement that will enable Commerzbank AG to match AfDB's undertaking in every transaction, thereby creating a maximum portfolio of up to USD 200 million. The facility will also result in the provision of significant support to African banks and SMEs. Counting roll-overs, it is expected to facilitate about USD 1.2 billion of trade in equipment, raw materials, intermediate and finished goods over the 3-year period.
Moreover, the proposed facility aligns with AfDB's Regional Member Countries' priorities to promote trade as was reaffirmed by the African Union at its 18th Ordinary Session in January 2012. It is also in line with the Bank's Ten-year Strategy and Regional Integration Strategies which seek to consolidate its engagement in trade finance in Africa.
Distributed by the African Press Organization on behalf of the African Development Bank (AfDB).
About Commerzbank AG: Commerzbank AG is a leading international bank headquartered in Frankfurt, Germany. It is a leading provider of trade finance in Africa with a trade portfolio of approximately of USD 6 billion and an active network of over 500 correspondent banks on the continent. Commerzbank AG captures significant trade flows in Africa and it is one of the leading European banks in terms of LC issuance and reimbursement in Africa. It has six representative offices in Africa located in Cairo, Tripoli, Addis Ababa, Lagos, Luanda, and Johannesburg. Commerzbank AG's long term ratings are A2/P-1 (Moody's), A/A-1 (S&P) and A+/F1+ (Fitch).For further information please visit: www.commerzbank.com
Contacts Information: Sabrina Hadjadj Aoul, Senior Communications Officer, T. +216 71 10 26 21 / C. +216 98 70 98 43 / [email protected] - Yaw Kuffour, Lead Trade Finance Specialist, T. +216 71 10 22 85 / [email protected]
Press releases are also available in the Bank's website at http://j.mp/AfDB_Media