The Eurasian Development Bank and Germany’s Deutsche Bank to grant trade financing with guarantees from export credit agencies
On 18 September 2007, The Eurasian Development Bank (EDB) and Deutsche Bank signed a framework agreement under which the banks will expand opportunities for clients to secure trade financing in the CIS.
Under the agreement, the EDB is expected to provide mid- and long-term financing for import operations with a guarantee / insurance coverage from European export credit agencies. The conditions of the agreement allow EDB clients to secure loans in order to purchase commodities from European countries, including industrial equipment, machinery and technologies, as well as related services. Financing volumes amount to roughly 85% of the value of each trade contract, and the average financing term is 7-10 years.
“By signing this framework agreement with Deutsche Bank, the Eurasian Development Bank is expanding its opportunities to extend flexible financing to our clients under optimal terms, considering the specifics of each project. There is high demand for trade financing among clients interested in importing capital intensive commodities categorised as fixed assets, such as industrial equipment, including full turn-key systems, machinery, etc.” said Dmitri Krasilnikov, the head of the EDB’s Corporate Finance and Financial Institutes Department. “Direct shipments from European manufacturers will help people receive long-term financing for purchasing equipment, for example, from Germany, Sweden, the Czech Republic of Poland - and it will also lower financing costs and financial sector market risks," Mr. Krasilnikov, a member of the EDB’s management board, said as the agreement was being signed with Deutsche Bank.
Currently, the EDB has already signed similar agreements with other financial institutions, such as the Japanese Bank of International Cooperation JBIC), the Nordic Investment Bank (NIB), and the Islamic Development Bank (IDB), among others.
The Eurasian Development Bank is an international financial organization instituted by Russia and Kazakhstan in January 2006 in order to stimulate development of market economies in its member countries, as well as their sustainable economic growth and expansion of mutual trade and economic ties. The EDB is dedicated to becoming one of the key components of the financial infrastructure in Eurasia, serving as an effective investment mechanism for the development of cooperation among member countries, facilitating deeper integration processes and aligning the levels of socio-economic development in the countries in the post-Soviet space. The Bank was created per an initiative of the Presidents of the Russian Federation and the Republic of Kazakhstan. The EDB’s charter capital currently amounts to USD 1.5 billion.