International Islamic Trade Finance Signs US$1.2bn Trade Agreements

The International Islamic Trade Finance Corporation (ITFC) , member of the Islamic Development Bank (IsDB) Group, has signed ten major Trade Financing Agreements worth more than US$1.2 Billion, and Trade Development Agreements with its member countries from Asia and Africa, at the 46th IsDB Annual Meeting of the IsDB Group held in Tashkent, Uzbekistan earlier this month.

Furthermore, the framework agreements, which provide public and private sector financing, as well as Trade Related Technical Assistance programs for export development and SME development initiatives, target high growth industries including agricultural and energy and support the purchase of critical medical supplies. 

ITFC CEO, Eng. Hani Salem Sonbol commented, “We are proud to have signed 10 trade financing and the trade development agreements at the 46th IsDB Annual Meeting. The impact of these agreements will be significant for ordinary citizens and will greatly enhance their economic prosperity.  This significant milestone also reaffirms the mutual trust between our member countries throughout CIS and Africa regions and the ITFC teams.  Furthermore, ITFC is dedicated to support economic growth among OIC member countries, especially during the challenging times of the COVID-19 pandemic period.”

Financing Agreements:

Signing of an Addendum to the US$ 1.5 billion Framework Agreement between ITFC & Burkina Faso:  A 5-Year US$1.5 billion Framework Agreement between ITFC and the Government of Burkina Faso was initially signed in October 2018 to set the key areas of cooperation. Following the global crisis linked to COVID-19, ITFC CEO and H.E Lassane Kabore Minister of Economy, Finance & Development of Burkina Faso signed an Addendum to the revised Framework Agreement. ITFC will contribute to finance priority projects in Burkina Faso in the agriculture sector, health sector and the private sector, including but not limited to export of agricultural commodities and import of energy commodities, such as refined petroleum products, provision of financing to secure the import of medicines and health equipment, and the implementation of technical assistance programs for strategic sectors of the national economy.

Signing of a 3-Year, EUR 330 million Framework Agreement between ITFC and The Union of Comoros: To reinforce the cooperation between ITFC and the Union of Comoros, ITFC CEO and the Alternate Governor for Union of Comoros H.E. Mr. Fouady Goulame signed a EUR 330 million 3 year Framework Agreement to support the country’s food and energy security with the importation of strategic commodities such as petroleum products, rice, and other foodstuff in line with Comoros’s strategic requirements. The Agreement will also provide health sector support and SME financing support and offer technical assistance projects to support the country’s national development goals.

Signing of several Murabaha Agreements under the action plan for 2021 between ITFC and Mauritania: Mohamed Lemine Ould Dehbi, Minister of Finance, Mauritania along with ITFC CEO signed a Murabaha Trade Financing Agreement to support the health sector of the country. As part of this agreement, ITFC will provide US$10 million to CAMEC, the government entity in charge of distributing medicine in the public sector, and a further US$20 million to SNIM, the second largest African producer of iron ore and a major player in the country’s economy.  A renewal of the facility with SOMELEC, a state-owned company with responsibility to ensure energy security in the country (production of electricity) was also signed to support the national development goals in the energy sector.

Amendment to Framework Agreement with Uzbekistan.  A US$500 million Agreement was signed between ITFC and the Republic of Uzbekistan in 2019. The purpose of the Amendment is to expand the cooperation by including new areas, extend the validity of the Agreement by an additional one year, make clarifications in the existing text and most importantly to increase the tenor of financing from 12 months to 24 months.  This extension will enable ITFC to better serve the financing needs of the Government entities and the private sector in Uzbekistan. This was signed by Mr. Shukhrat Vafaev, Deputy Minister of Investments and Foreign Trade of the Republic of Uzbekistan (IsDB Alternate Governor).

Murabaha Agreements under the US$500 million Framework Agreement, signed between the Republic of Uzbekistan and ITFC in 2019, to support SMEs with the recovery from the negative impact of COVID-19 pandemic, part of the IsDB 3R Programme:

Trustbank – Signing of US$ 15 million Line of Trade Finance Agreement between ITFC and Private Joint-Stock Bank Trustbank. Eng. Hani Salem Sonbol, CEO ITFC and Mr. Sardor Normukhamedov, Chairman of Management Board signed a Murabaha of US$15 million facility to meet the trade finance needs of private sector and SME clients of Trustbank. Trustbank is an existing partner, who is signing the third financing facility in Uzbekistan, making it most active private sector partner of ITFC in Uzbekistan.

Uzbekistan Integrated Trade Solution

Turonbank – Signing of US$10 million Line of Trade Financing Terms between ITFC and Joint-Stock Commercial Bank “Turonbank”, Uzbekistan.  ITFC signed a US$ 10 million Murabaha with Joint-Stock Commercial Bank Turonbank to to meet the trade finance needs of private sector and SME clients of the bank.

Turonbank – Technical Assistance Agreement between ITFC and JSCB Turonbank on the building capacity of Turon Bank on IFRS reporting.  As part of its new strategy to offer integrated solutions for the development of trade for the benefit of its member countries, ITFC agreed to provide and support a technical assistance project for the benefit of the bank. In this regard, ITFC is going to help Turonbank with developing internal capacity for transformation of its financial reporting to IFRS under ITFC’s technical assistance.

Other Agreements

Murabaha Trade Financing Amendment to the Agreement between STO, Maldives for US$75 million to finance the purchase of fuel and staple food.  Mr. Husen Amru Mohamed Rashad, Chief Executive Officer and Managing Director of the State Trading Organization (STO) and ITFC CEO signed an agreement renewal.  Through this Agreement, ITFC is supporting STO’s financing of strategic commodities of petroleum products and staple food imports. The financing is critical to nurture the livelihood of the population and support the recovery of the tourism sector for the country’s economic growth. 

Grant Agreement of US$50,000 for medical equipment.  The Government of Bangladesh, represented by Ms. Fatima Yasmin, Secretary of Economic Relations Division (ERD), Ministry of Finance of People’s Republic of Bangladesh and Alternate Governor of IsDB, and ITFC CEO signed a Grant Agreement for the provision of five machines for public hospitals in Bangladesh whose facilities are overwhelmed by the surge in COVID-19 patients.  The Project will strengthen the country’s capacity in terms of preparedness and response to the pandemic by providing the appropriate treatment for the critical condition of COVID-19 patients.

ITFC and the Islamic Food Processing Association Signed MOU Partnership to Extend Financing for Private Entities in Agricultural Sector.  IFPA CEO, Sheikh Bilal Khan and ITFC CEO signed a Memorandum of Understanding with a goal to provide access to finance for SMEs through local banks and to aid private sector companies in the Agri-food chain in selected OIC member countries. IFPA is one of the strategic initiatives proposed by the Islamic Organization for Food Security during the second General Assembly held in Jeddah, Saudi Arabia in August 2019.  To enhance food security, IFPA is supporting companies in the agri-food sector to emerge from the COVID-19 global pandemic by pursuing growth opportunities.

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