Green trade financing deal signed

Kathmandu, Sept. 28

International Finance Corporation (IFC), a member of the World Bank Group, is extending an unfunded short-term facility under the Global Trade Finance Programme (GTFP) to Global IME Bank, with a carve out allocated towards climate smart trade finance.

This is the first IFC green trade finance line globally.

Chief Executive Officer of Global IME Bank, Ratna Raj Bajracharya, and Regional Manager Financial Institutions Group South Asia of the IFC, Joon Young Park, singed on the document.

GTFP is IFC’s response to the shortage of trade finance limits in developing economies such as Nepal and the project will support Global IME Bank in addressing the demand and supply gap for its growing trade business, the bank said in a statement on Wednesday.

According to it, inclusion of ‘green’ component in this GTFP is a strong value proposition for the Bank to do climate trade business responding to the need of the hour. 

GIBL said that the GTFP line is expected to improve the access to Trade Finance for the bank and its trade finance customers.

Likewise, IFC anticipates that GTFP improves overall market integration by maintaining and expanding trade finance, financial linkages and trade across multiple markets through strengthening bilateral correspondent banking connections and serving as an enabling platform to make new connections between local and international banks and their customers.

Speaking on the occasion, Chairman of GIBL, Chandra Prasad Dhakal, said that the agreement would be a roadmap for climate smart trade financing in Nepal.

“This IFC GTFP line will allow the bank to connect with more global confirming banks with better capacity which will help the Bank process more transaction for its clients in different geographies.” said Bajracharya. He said that this fits into the bank’s strategic agenda as it has a climate component to it.

"This will help the bank better address the growing demand for trade finance in Nepal," said Babacar S. Faye, IFC's Resident Representative in Nepal. “While responding to Nepal’s shortage of trade finance, this facility also focuses on addressing the impact of climate change, by supporting the adoption of energy efficient technologies, ensuring sustainability of operations, and cutting carbon emissions.”

He said that IFC has now had partnership in trade and finance, but it would go in other sectors such as energy, manufacturing and agriculture, among others in the days to come.

This is the second partnership between IFC and Global IME. In 2019, IFC invested $20 million in the bank to support SMEs.

 Published in The Rising Nepal daily on 29 September 2022.