EDB Adopted Trade Financing Instruments Programme

Almaty, 15 June 2010. The EDB Executive Board adopted the Programme of Trade Financing Instruments and Development of Mutual Trade between the Member States by Opening Target Loan Facilities for Financial Institutes.

The purpose of this Programme is to develop new external financing sources for financial institutions from the member states and securing loans for the real sector players engaging in foreign trade. As is expected, favourable conditions for importers and exporters will be created, and access to new commodity and services markets will be eased. The ultimate goal is to facilitate mutual trade and integration of member states.

“This document has long been in the pipeline, but adoption was delayed by the global financial crisis,” said Dmitry Krasilnikov, Member of the EDB Executive Board and Head of Corporate Finance and Financial Institutions. “The stabilisation of the global and regional infrastructure today enables the Bank to place a greater emphasis on the financial sector”.

“The Programme includes both direct financing of export and import contracts and the Bank’s support of letters of credit, guarantees, etc.,” further commented Dmitry Krasilnikov. “The term of financing for sub-loans under such facilities will be up to 12 months with the possibility of double extension. Rates will be set on a case-by-case basis. From the technical point of view, this EDB Programme is similar to other successful ongoing programmes of major development institutions, and its financing terms are competitive”.

The Bank expects that its Programme will activate co-operation with local financial institutions and enhance the attractiveness of other market players as potential investment targets; just as importantly in the contexts of the EDB’s mission, the Programme will create favourable conditions for the development of companies engaging in foreign trade in the member states.

The inclusion of short-term loans and expansion of the partner base by adding financial sector players will diversify the Bank’s product range and credit risks and add more flexibility to its asset management, said Dmitry Krasilnikov.