IMAGE: galyna_p –
stock.adobe.com SUPPORTING TRADE FINANCE CONTRIBUTES TO THE SDGS
The 2030 Agenda for Sustainable Development recognizes international trade as an engine for inclusive economic growth and poverty reduction, and an important means of achieving the SDGs. Multilateral development
finance institutions have been supporting international trade for decades. According to the World Trade Organization, multilateral development banks have increased financing and/or guarantees in the poorest parts in the world. In 2018, these programs supported around US$30 billion in trade transactions in low-income countries, a 50 percent increase since 2016, with a greater focus on SMEs.
Strengthen means of implementation and revitalize global partnership
End poverty in all its forms
Ensure sustainable consumption and production patterns
Achieve food security and promote sustainable agriculture
Promote sustainable industrialization and foster innovation
Promote inclusive and sustainable economic growth, productive employment and decent work for all
Promote gender equality, empowerment of all women, equal rights to economic resources, and access to financial services
DEVELOPMENT COOPERATION: MORE IMPACT TOGETHER
The OPEC Fund initiated its trade finance operations in 2006, and since then has committed US$3.8 billion in financing to support global trade in 55 countries, and some 7,700 beneficiaries through 330 issuing banks. In 2020, as both global trade and
trade finance were impacted by the COVID-19 pandemic, the organization provided US$455 million in trade finance loans to emerging economies to help SMEs access much needed trade credit lines and international markets and to support international trade for companies and governments. In 2020, the OPEC Fund also
continued to cooperate and co-finance with the international development finance community and financial institutions. The organization has increased its trade finance program with international financial services
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firm Natixis – part of Groupe BPCE, France’s second-largest retail banking group – from US$50 to US$100 million to support trade transactions such as imports of medical equipment and sugar on the African continent, and in Asia. Another US$50 million unfunded risk- sharing agreement was signed with the Eastern and Southern African Trade and Development Bank (TDB) to improve access to trade finance in Eastern and Southern Africa. The OPEC Fund’s partners in trade
finance include the International Islamic Trade Finance Corporation (ITFC), the European Bank for Reconstruction and Development (EBRD), the Asian Development Bank (ADB), JP Morgan, Natixis, The Eastern and Southern African Trade and Development Bank (TDB), Standard Chartered, IDB Invest and other commercial banks.
THE OPEC FUND AND THE ITFC: A GROWING PARTNERSHIP
The OPEC Fund and the ITFC began working together in 2007. Since then, the OPEC Fund has contributed more than US$2.1 billion to transactions worth many times this amount, syndicated by the ITFC. Together, the two organizations support a range of beneficiaries along the trade value chain. This can include helping smallholder farmers secure seeds and technical assistance to improve yields and achieve guaranteed selling prices, or supporting the energy security of developing countries. The OPEC Fund’s loan portfolio financed with the ITFC covers agriculture, commodities, energy, industry, health and mineral resources.
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