Regional - Attijariwafa Bank - Partnership for Trade Development in Africa


Project Summary

Approval Date 17 Jul 2019
Sovereign / Non-Sovereign Non Sovereign
Sector Finance
DAC Sector Code 24030
Commitment U.A 79,781,717.22
Status Approved

Project General Description

The project consists of a partnership between the African Development Bank (AfDB) and Attijariwafa Bank (AWB) for the development of trade in Africa in the form of a EUR 10 million unfinanced Risk Participation Agreement (RPA) under which both banks agree to share the default risk on a portfolio of eligible trade transactions initiated by African issuing banks (IBs). AWB SA is a Moroccan banking group and a Pan-African multinational based in Casablanca, born of the merger between Banque Commerciale du Maroc founded in 1911 (private bank deemed the first in Morocco) and Wafabank in 2003. The Bank’s share of risk will be at most 50% for every transaction except for five (5) IBs from Mauritania and Guinea-Conakry (Mauritania: Banque pour le commerce et l'industrie et Banque populaire de Mauritanie || Guinea Conakry: Banque Islamique Guinée, Orabank, and Banque pour le commerce et l’industrie) where coverage may be up to 75%. Under this Agreement, AWB will place TF resources at the disposal of local banks in Africa and guarantee their financing commitments by confirming their letters of credit (L/C). AfDB will then guarantee up to a maximum of 50% of the value of these transactions confirmed by AWB. This mechanism will serve to guarantee obligations arising from TF instruments such as credit confirmation letters, acceptance letters, export loans (pre-shipment), import loans, the financing of export and import bills, warranty cards, etc. The RPA ceiling will be in EUR, but related transactions can be either in EUR or USD. The duration of the mechanism will be 3 years and the maturity of each transaction cannot exceed 2 years, mindful that most transactions will be for 90 days, in line with standard practice in TF operations.

Project Objectives

This RPA aims to: (i) contribute in reducing the TF deficit in Africa; (ii) promote inclusive economic growth and diversification through support for industrialisation; and (ii) increase intra-African trade and strengthen regional integration. The proposed mechanism will help meet the growing demand for TF in Africa, particularly in RMCs and States in transition, providing support to external trade in vital economic sectors like agriculture through fertiliser imports and exports. It will promote regional integration by stimulating intra-African trade and Africa’s industrialisation while ensuring imports of high value-added equipment and machines.

Beneficiaries

The beneficiaries of this partnership are IBs in Africa experiencing a sharp decline in their TF activities due to insufficient confirmation facilities placed at their disposal by international confirming banks (CB). The final beneficiaries are SMEs and local businesses in 18 RMCs, including LICs, which rely on 130 issuing banks, 51 of them in LICs and 21 in States in transition, to honour their TF commitments.

Participating Organization

Funding
African Development Bank

Information

IATI identifier 46002-P-Z1-HAB-073
Last Update 21 Oct 2020

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Contact Details

Email private-sector@afdb.org

Geographic Location

Country Multinational