global trade finance program

OPPORTUNITIES IN FINANCIAL MARKETS

Global Trade Finance Program

ifc.org/gtfp GLOBAL TRADE FINANCE PROGRAM

IFC: Key Facts

Credit Rating: Triple-A (Moody’s, Standard & Poor’s)

Portfolio: $32.4 billion, representing 1,490 investments in 116 countries (as of June 30, 2008)

Total Staff: Approximately 3,300 (50 percent of whom are based outside of Washington, D.C.)

Number of Transactions Committed in Fiscal Year 2008: 372

Industry Coverage:• Global financial markets;

private equity and investment funds

• Global manufacturing and services; agribusiness; health and education

• Infrastructure; information and communication technologies; oil, gas, mining and chemicals; subnational finance

Our Shared Vision is that people should have the opportunity

to escape poverty and improve their lives.

Our Purpose is to

• Promote open and competitive markets in developing

countries

• Support companies and other private sector partners

• Generate productive jobs and deliver basic services

• Create opportunities for people to escape poverty and

improve their lives

Our Core Values are

• Excellence

• Commitment

• Integrity

• Teamwork

IFC is a member of the World Bank Group, which comprises four rela-ted development institutions, each with its own budget, management, and governance structure: the World Bank; its insurance arm, the Mul-tilateral Investment Guarantee Agency; the International Center for the Settlement of Investment Disputes; and IFC.

Owned by 179 shareholder countries, we are global—for more than 50 years we have focused on developing countries.

We are local—with a full time presence in more than 80 countries and activities in many others. We put our clients first. We can work with you anywhere in the developing world, building long-term partnerships, exchanging knowledge, and growing together to achieve “win-win” re-sults.

Our broad range of Investment and Advisory Services support one goal: improving lives and raising living standards through sustainable private sector development. They are flexible and can be tailored to a client’s specific needs.

In 2008, we invested approximately $11.4 billion from our own account in 85 countries, mobilized an additional $4.8 billion through syndica-tions and structured finance, and provided advisory services in 97 countries. Since our founding in 1956, we have committed more than $64 billion of our own funds and arranged more than $27 billion in syn-dications for 3,760 companies in 141 developing countries. We have also provided more than $1 billion in advisory services in the past 20 years, funded primarily by our development partners.

The IFC Difference

GLOBAL TRADE FINANCE PROGRAM ifc.org/gtfp

About the GTFP

What are the Business Benefits?

GTFP delivers global reach and maximum flexibility to assist trade finance deals by:

• Linking banks to a global network of partnerships

• Covering up to 100 percent of transaction value• Offering market-driven pricing• Delivering 24 hour-turn-around• Providing tenors of up to three years to support

capital goods imports

THE GLOBAL TRADE FINANCE PROGRAM

IFC Global Trade Finance Program (GTFP) guarantees the trade-related payment obligations of approved financial institutions in emerging markets (Issuing Banks) across all regions of the world. Through the GTFP bank network, local financial institutions can establish working partnerships with a vast number of major international and regional banks (Confirming Banks) in the program, thus broadening access to fi-nance. By tapping the risk mitigation provided by the GTFP, international trade finance providers can en-hance their global reach confidently, gain familiarity in new markets, and build relationships with quality counterparty banks in growth markets around the world.

The GTFP extends and complements the capacity of banks to deliver trade finance by providing risk miti-

gation on a per-transaction basis in challenging mar-kets where trade lines may be limited. With its global mandate, dedicated trade specialists, and over 320 banks already in the GTFP, participants can finance their imports and exports conveniently by accessing a program that links them to an extensive network of bank partners worldwide. Please refer to ifc.org/gtfp for updated country and bank coverage.

HOW DOES IFC SUPPORT TRADE

TRANSACTIONS?

The GTFP offers Confirming Banks partial or full guarantees which cover payment risk on banks in emerging markets. These guarantees are transaction-specific and apply to trade-related deals which may be evidenced by a variety of underlying instruments.

How Does a Bank Participate?

1. Contact the GTFP to discuss needs and

eligibility criteria

2. Sign the master documentation

3. Consult with the GTFP team for a guarantee

fee quote for a specific trade

4. There are no up-front fees or commitment fees

associated with joining the GTFP

What are the Advantages for

Confirming Banks?

For banks receiving guarantee coverage, the GTFP:• Expands geographical coverage for servicing

export clients• Provides risk coverage to leverage trade lines

in new or challenging markets• Builds new correspondent bank relationships

on a low-risk basis• Mitigates provisioning and Basel II capital

requirements

What are the Advantages for Issuing Banks?

The GTFP supports Issuing Banks by:

• Offering opportunities to build relationships

with new correspondent banks

• Facilitating trade financing via a global network

of GTFP Confirming Banks

• Mitigating risk profile to counterparty banks

• Reducing cash collateral needs

• Delivering advisory services and training to

improve operating standards


GTFP Product Line

COVERAGE FOR UNFUNDED TRADE TRANSACTIONS

IFC covers import letters of credit and standby letters of credit (LCs), as well as the obligation of the issuer of performance bonds, bid bonds, and ad-vance payment guarantees.

COVERAGE FOR FUNDED TRADE TRANSACTIONS

IFC covers the obligation of the issuer of a financial instrument for trade fi-nancing on-lent to its clients. Instruments such as promissory notes, stand-by LC s, or credit guarantees in favor of participating Confirming Banks that provide funds to the Issuing Bank can be covered under full or partial guar-antees from IFC. Trade finance credit from Confirming Banks supports LC bill discounting or negotiation, bankers acceptance financing, pre-export or post-shipment financing, and post-import financing on a trade asset portfolio or for individual trade transactions.


The GTFP provides coverage for a variety of trade related instruments

TRANSACTIONS EXAMPLES:

Post-import financing: Steel from Russia to Kazakhstan. The funding bank was based in Ireland and the GTFP provided 100 percent guarantee for $2.2 mln.

Post-import financing: Computer equipment from Switzerland to Azerbaijan. The funding bank was based in Germany and the GTFP provided 100 percent guarantee for $150,000.

Pre-export loan: Fish from Russia to UK. The confirming bank is based in the US and the GTFP provided 100 percent guarantee for $6 mln.

Trade facility letter: Tires from Russia to Kazakhstan. The confirming bank is based in the US and the GTFP provided 64 percent guarantee for $15.7 mln.

Letter of credit: Aluminum from Ukraine to Tanzania. The confirming bank is based in Germany and the GTFP provided 100 percent guarantee for $375,000.

Irrevocable Reimbursement Undertaking: Construction machinery exports to East Africa from the Netherlands issued by a Lebanese bank. The Confirming Bank was based in Austria and the GTFP provided 85 percent guarantee for $11 million.

Discount against Acceptance of LC documents (Third Bank LC): Machinery imports into West Africa. The Issuing Bank was based in Malta and the Confirming (Discounting) Bank was based in China. The GTFP provided 100 percent guarantee for $300,000.

Promissory Note: Soybean oil exports from Argentina to Ecuador. Post-import financing was provided for six months. The Confirming Bank was based in the US and the GTFP provided a 100 percent guarantee for $1.5 million.

Bid Bond: Construction services in Qatar provided by a Lebanese company. The Confirming Bank was based in the UAE. The tenor was for four months and the GTFP provided 85 percent guarantee for $2.3 million.

Performance Bond: Supply of methanol from the Netherlands to Nigeria. The Confirming Bank was based in South Africa and the GTFP provided 100 percent guarantee for $10 million.


Achieving International Standards through Trade Advisory Services

Benefits:

IFC provides local financial institutions with training

and support in order to:

• Transfer current international best practices in

trade finance to local markets

• Upgrade the operational and technical skills of

trade finance back offices

• Improve trade finance risk mitigation techniques

• Upgrade skills in structuring basic and complex

trade finance transactions

How does a Bank Participate?

In order to identify the relevant trade advisory

services for a particular client bank, IFC advisory

services initially conducts a diagnostic study to

assess needs and develop appropriate terms of

reference. IFC advisory services will then work with

the client bank to procure a suitable consultant

to deliver the services proposed in the terms of

reference.

For more information please contact:

[email protected]

The Trade Advisory Program is an integral component

of the GTFP. It is designed to help participating banks

build their capacity in the areas of trade finance and

international trade operations. Since June 2006, more

than 1150 participants from over 250 banks across 50

countries have benefited from the 50 training and advi-

sory services programs. This advisory services initiative is

supported by IFC and various donor countries.

TYPES OF TRAININF PROVIDED:

Level I - Basic Training: One week training program covering basic documentary credit transactions and collections.

Level II – Advanced Training: One week training program covering issues such as intermediate documentary credit transactions, structured trade finance products, forward sales, and hedging techniques.

SME Training: One day workshop designed for one specific bank and its clients. The goal of this workshop is to create awareness for the participating banks’ existing and prospec-tive clients on the viability of trade finance as a financing option.

E-Learning Training: Two month online course and examination that provides specific knowledge on the new International Documen-tary Credit Rules (UCP 600) for trade finance professionals from banks.

Short-term and Long-term Advisory Services:In-house placement of trade finance profes-sionals. The duration is determined based on the client bank’s needs and can range from 1-12 months.


GTFP Highlights

• Links over 320 banks into a global network of trade

partnerships

• Covers the risk of over 150 participating Issuing

Banks

• Covers large and small transactions in emerging

markets

• Simple master agreements executed by

participating banks

• 24-48 hour turnaround for guarantee issuance

• Offers commercial pricing with no commitment fees

• Covers up to 100 percent of country and commercial

risk

• Guarantees issued for tenors up to three years

• Over 2,300 guarantees for $3 billion issued to date


IFC2121 Pennsylvania Ave., NWWashington, DC 20433, USAifc.org/gtfp

IFC Europe and Central Asia36, bld 1, Bolshaya Molchanovka str.Moscow, 121069, Russia

Management Headquarters

Scott Stevenson

Manager – Trade

Tel: +1.202.458.5697

Email: [email protected]

Bonnie Galat

Global Head – Marketing &

Distribution

Tel: +1.202.473.5335


Rogers LeBaron

Senior Advisor

Tel: +1.202.458.7518


Europe & Central Asia

Mark Rozanski

Regional Head

Tel: +1.202.473.4640


Latin America

Antonio Alves

Regional Head

Tel: +1.202.458.5056


Raquel Segrera

Trade Specialist

Tel: +57.31.1876.1339


Jose Vivanco

Trade Specialist

Tel: + 52.55.3098.0232


The GTFP Team

Middle East & Asia

Priyamvada Singh

Regional Head

Tel: +1.202.458.4786


Shehzad Sharjeel

Trade Finance Specialist

Tel: +20.2.2461.4270


Marketing

Zeynep Ersel

Global Marketing Officer

Tel:+1.202.458.2502


Raj Salooja

Analyst

Tel: +1.202.458.9626


Operations

Montserrat Ganuza

Supervisor Trade Operations

Tel: +1.202.458.5615


Li Tang

Trade Operations

Tel: +1.202.473.7678


Beatrix von Heintschel

Trade Operations

Tel:+1.202.473.0071


Advisory Services

Gimhani Talwatte Seneviratne

Head, Trade Advisory, Africa

Phone +27.11.731.3005


Makiko Toyoda

Head, Trade Advisory, Global

Tel: +1.202.458.0142


Astou Sylla

Coordinator - Trade Advisory

Tel: +1.202.458.8441


Administrative Support Team

Therese Ndeme

Program Assistant

Tel: +1.202.458.2232


Christine Chan Chor

Program Assistant

Tel: +1.202.458.0134


ifc.org 2009

global trade finance program

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