Global Trade Finance Program

Global Trade Finance Program OPPORTUNITIES IN FINANCIAL MARKETS

ifc.org/gtfp

GLOBAL TRADE FINANCE PROGRAM

The IFC Difference IFC is a member of the World Bank Group, which comprises four related development institutions, each with its own budget, management, and governance structure: the World Bank; its insurance arm, the Multilateral 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” results.

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.

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

In 2008, we invested approximately $11.4 billion from our own account in 85 countries, mobilized an additional $4.8 billion through syndications 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 syndications 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.

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

GLOBAL TRADE FINANCE PROGRAM

ifc.org/gtfp

About the GTFP

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 finance. By tapping the risk mitigation provided by the GTFP, international trade finance providers can enhance 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-

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

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

gation on a per-transaction basis in challenging markets 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 transactionspecific 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 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

ifc.org/gtfp

GLOBAL TRADE FINANCE PROGRAM

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 advance payment guarantees.

COVERAGE FOR FUNDED TRADE TRANSACTIONS IFC covers the obligation of the issuer of a financial instrument for trade financing on-lent to its clients. Instruments such as promissory notes, standby 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 guarantees 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.

GLOBAL TRADE FINANCE PROGRAM

ifc.org/gtfp

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.

ifc.org/gtfp

GLOBAL TRADE FINANCE PROGRAM

Achieving International Standards through Trade Advisory Services 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

TYPES OF TRAININF PROVIDED:

international trade operations. Since June 2006, more than 1150 participants from over 250 banks across 50 countries have benefited from the 50 training and advisory services programs. This advisory services initiative is

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

supported by IFC and various donor countries.

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: gtfptraining@ifc.org

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 prospective 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 Documentary Credit Rules (UCP 600) for trade finance professionals from banks.

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

GLOBAL TRADE FINANCE PROGRAM

ifc.org/gtfp

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

ifc.org/gtfp

GLOBAL TRADE FINANCE PROGRAM

The GTFP Team Management Headquarters Scott Stevenson Manager – Trade Tel: +1.202.458.5697 Email: SStevenson@ifc.org Bonnie Galat Global Head – Marketing & Distribution Tel: +1.202.473.5335 Email: BGalat@ifc.org Rogers LeBaron Senior Advisor Tel: +1.202.458.7518 Email: RLebaron@ifc.org Europe & Central Asia Mark Rozanski Regional Head Tel: +1.202.473.4640 Email: MRozanski@ifc.org Latin America Antonio Alves Regional Head Tel: +1.202.458.5056 Email: AAlves1@ifc.org Raquel Segrera Trade Specialist Tel: +57.31.1876.1339 Email: RSegrera@ifc.org

Middle East & Asia Priyamvada Singh Regional Head Tel: +1.202.458.4786 Email: PSingh3@ifc.org Shehzad Sharjeel Trade Finance Specialist Tel: +20.2.2461.4270 Email: SSharjeel1@ifc.org Marketing Zeynep Ersel Global Marketing Officer Tel:+1.202.458.2502 Email: ZErsel@ifc.org Raj Salooja Analyst Tel: +1.202.458.9626 Email: RSalooja@ifc.org Operations Montserrat Ganuza Supervisor Trade Operations Tel: +1.202.458.5615 Email: MGanuza@ifc.org Li Tang Trade Operations Tel: +1.202.473.7678 Email: LTang@ifc.org

Beatrix von Heintschel Trade Operations Tel:+1.202.473.0071 Email: BVonheintschel@ifc.org Advisory Services Gimhani Talwatte Seneviratne Head, Trade Advisory, Africa Phone +27.11.731.3005 Email: GTalwatte@ifc.org Makiko Toyoda Head, Trade Advisory, Global Tel: +1.202.458.0142 Email: MToyoda@ifc.org Astou Sylla Coordinator - Trade Advisory Tel: +1.202.458.8441 Email: ASylla@ifc.org Administrative Support Team Therese Ndeme Program Assistant Tel: +1.202.458.2232 Email: TNdeme@ifc.org Christine Chan Chor Program Assistant Tel: +1.202.458.0134 Email: CChanchor@ifc.org

Jose Vivanco Trade Specialist Tel: + 52.55.3098.0232 Email: JVivanco@ifc.org

IFC 2121 Pennsylvania Ave., NW Washington, DC 20433, USA ifc.org/gtfp

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2009