Standard Chartered and IFC enter $1.25 billion deal

Standard Chartered and World Bank Group member IFC have agreed to develop a $1.25 billion funding partnership to facilitate global trade finance.

The agreement, a trade finance initiative announced by World Bank President Robert Zoellick, is the first to emerge from the Global Trade Liquidity Programme (GTLP). The GTLP, an initiative that will raise funds from private sector banks, governments, and international finance and development institutions, will aid in extending trade finance to under-served importers and exporters in developing countries.

Under the programme, Standard Chartered will originate trade finance transactions of up to $1.25 billion from emerging markets banks which, in turn, will extend trade financing to their importer and exporter clients. IFC, as well as other development organisations, will participate in the risk and invest up to $500 million in these transactions. The programme is expected to support trade flows of $5 billion per year in Asia, Middle East, Africa and Latin American countries.

Peter Sands, Group Chief Executive of Standard Chartered, said, "It's great to work in partnership with the IFC to create this pioneering programme to promote global trade finance. We are proud to be the first global bank to join the partnership to get world trade moving again." He added, "Our established footprint in Asia, Africa, and the Middle East, along with our long history of supporting trade flows to and from these regions, position us well to provide vital funding to growing economies now."

"We welcome the tremendous degree of cooperation between public and private sector institutions that allows us to come together to launch the Global Trade Liquidity Programme for developing countries. I welcome G-20 support for this timely and targeted solution that will provide trade finance to support businesses across developing markets," said Zoellick.

The GTLP, representing a unique and coordinated global initiative, aims to address trade finance liquidity constraints brought about by the global credit crunch.