UniCredit today signed a preliminary agreement with the International Finance Corporation (IFC), the private lending arm of the World Bank, to allocate €500 million in support international trade financing with developing markets.
UniCredit and the IFC signed a mandated letter to commit the funds to the Global Trade Liquidity Program (GTLP), which guarantees export flows towards a number of developing developing countries and their banks.
The GTLP operates as a risk-sharing facility that simplifies the confirmation of export letters of credit or standby letters of credit for commercial transactions that require a bank guarantee in a number of emerging markets.
Once begun, this risk participation agreement will enable UniCredit to cover risks- related to letters of credit and standby letters of credit in countries pre-authorized by the IFC for predetermined amounts and durations.
The agreement shares risk across 38 emerging markets - mostly in Africa and Southeast Asia - for UniCredit and its 138 correspondent banks.
UniCredit believes the GTLP will benefit its clients who are medium-sized companies that export to emerging countries and also benefit its banking partners who otherwise might not increase their exposure to developing countries and banks in export destinations.
Gianni Franco Papa, Deputy General Manager and Head of Corporate & Investment Banking of UniCredit says: "This agreement comes at a delicate time for economies in emerging markets, particularly dependent to oil and raw materials. It is an initiative aimed at giving new impetus to commercial trade, especially within markets where our clients' exposure is still relatively small and therefore offer significant opportunities. Our goal is to help and accompany high-quality European companies in their growth across the world -- a goal that is consistent with the international nature of our Group, which is spread over 50 international markets."
Dimitris Tsitsiragos, Vice President Global Client Services, IFC said "UniCredit Group is a key partner for IFC , one of our largest and most active in terms of commitments in the European markets, and in our trade programs. We welcome this new transaction which will help support emerging market trade in a time of market turbulence".
Milan, February 17, 2016
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence, to create opportunity where it's needed most. In FY15, our long-term investments in developing countries rose to nearly $18 billion, helping the private sector play an essential role in the global effort to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org/
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