EBRDTrade Facilitation Programme (TFP)
www.ebrd.com/tfpRogers LeBaron
Toronto 20 October 2004
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TFP TFP –– The Concept (1) The Concept (1) -- 27 Countries27 CountriesAlbania Armenia Azerbaijan Belarus Bosnia and Herzegovina Bulgaria Croatia Czech Republic Estonia Serbia & Montenegro FYR Macedonia Georgia Hungary Kazakhstan Kyrgyz RepublicLatvia Lithuania Moldova Poland Romania Russian Federation
Slovak Republic Slovenia Tajikistan Turkmenistan Ukraine Uzbekistan
Resident Offices
Regional Offices
Headquarters
TFP TFP -- The Concept (2)The Concept (2)
EBRD supports trade by providing
guarantees that cover risks arising from these trade finance transactions
short-term advances/financing to banks in the Countries of Operation for trade finance purposes
trade finance training and advisory service to banks
TFP TFP –– Guarantee TransactionGuarantee Transaction
Always involves a local bank (“Issuing Bank”) which issues a trade finance instrument (e.g. a letter of credit) and a foreign bank which confirms it to the exporter (“Confirming Bank”)
The trade finance instrument (e.g. L/C) ensures that the exporter receives payment upon or after delivery
EBRD Guarantee covers payment risks of the Issuing Bank to the Confirming Bank
Case Study: Export of Canadian Equipment to Case Study: Export of Canadian Equipment to RussiaRussia
An Canadian exporter sells agricultural equipment to Russia
A Russian Issuing Bank under the TFP opens a confirmed Letter of Credit to an Canadian Confirming Bank, payable in several instalments before, at and after delivery
EBRD guarantees payment of amounts or tenors which are not covered by Export Credit Agencies
EBRD guarantees up to 100% of the political and commercial payment risk
Standby L/C (under UCP 500)
Payable on first written demand
Payable 15 days after receipt of demand
Different from Export Credit Insurance
TFP TFP -- GuaranteesGuarantees
TFP TFP -- The Concept (3)The Concept (3)
TFP work through commercial banks
Provides up to 100% guarantee on the transaction amount
Covers both import and export transactions
Covers both political and commercial payment risk
Applicable for post-shipment and pre-exportfinancing
Additionality Additionality -- TransitionTransition
EBRD covers transactions which are not covered by other financial institutions or ECAs
Issuing Banks come from low & intermediate transition countries
Banks in advanced countries act as Confirming Banks (e.g. Poland, Hungary, Czech Republic)
Graduation process: from Issuing to Confirming
TFP is a tool for the market - used when needed
EBRD creates markets in low transition countries
IntraIntra--regional Dealsregional Deals
Combine Harvesters - Russia to Kazakhstan
Electricity - Russia to Georgia
Construction - Macedonia to Bosnia
Medical Equipment - Bulgaria to Macedonia
Wheat - Kazakhstan to Russia
Oil and jet fuel - Russia to Kazakhstan
Cattle - Hungary to Croatia
TFP TFP -- The Concept (4)The Concept (4)
Issuing Banks - 85 banks in 20 countries– Selected banks in EBRD countries of operation which
meet the following criteria:Engaged in or developing trade finance operations
Sound financial position and adequate operational procedures
Preferably privately owned with strong shareholders
Confirming banks - 507 confirming banks and subsidiaries in 66 countries
Parties to the TFP (2004)
All types of goods, commodities and equipment, except for EBRD’s general exclusion list and environmental exclusion listFacilitated by:
– L/C, Stand- by L/C and payment guarantees – trade- related promissory notes and bills of exchange– bid, performance bonds, contract guarantees– construction guarantees, leasing guarantees– credit card and other payment guarantees
Types of Goods and Trade Finance InstrumentsTypes of Goods and Trade Finance Instruments
Set on a deal by deal basis within established limits
Depends on country, bank, tenor, import/export
Russia 2.0 % - 3.0 % p.a.
Ukraine 2.0 % - 4.0 % p.a.
Central Asia 2.5 % - 4.0 % p.a.
Balkans 2.5 % - 4.0 % p.a.
Romania/Bulgaria 1.0 % - 3.0 % p.a.
Advanced countries 0.5 % p.a.
PricingPricing
Total number of guarantees issued: 2,900– Cover L/C’s issued by 77 banks in 20 countries of
EBRD’s Operation
– and confirmed by 170 banks in 45 countries
Total amount of trade transactions financed:EUR 1.6 billion
Amount of total trade supported:EUR 2 billion
– Confirming Banks shared app. 24 % of the portfolio risk
Achievements to Date (1999 Achievements to Date (1999 -- 2004)2004)
Transaction size from EUR 10,000 to EUR 30 million
Average deal size: EUR 0.6 million
More than 50% of transactions are below EUR 100,000
Average guarantee tenor: 10 months
… and no claims or losses
Achievements to Date (1999 Achievements to Date (1999 -- 2004)2004)
TFP Transactions p.a. 1999 TFP Transactions p.a. 1999 –– December 2003December 2003
0
100
200
300
400
500
600
700
800
900
1000
1999
2000
2001
2002
2003
Volume, € mlnNumber of Transactions
Transactions by Country of Importer (1999 Transactions by Country of Importer (1999 -- 2004)2004)
0.6%8.3Kyrgyz Republic
100%1,393Total0.24%3.3Other0.24%3.4Croatia0.49%6.8Bulgaria
1.72%23.9Serbia & Montenegro2.36%32.9Bosnia-Herzegovina2.63%36.6Romania2.92%40.7Georgia3.19%44.5Moldova3.25%45.3Belarus3.46%48.2Azerbaijan4.02%56Macedonia9.25%128.8Ukraine
10.88%151.6Uzbekistan17.44%242.9Kazakhstan37.32%519.9Russia
%By CountryTotal turnover (€mln)Country
Transactions by Country of Exporter (1999 Transactions by Country of Exporter (1999 -- 2004)2004)
Germany 348 transactions - EUR 135 mln
Italy 281 transactions - EUR 45 mln
Turkey 241 transactions - EUR 18 mln
Switzerland 190 transactions - EUR 142 mln
Austria 143 transactions - EUR 47 mln
France 117 transactions - EUR 33 mln
CanadaCanada 16 transactions EUR 26 mln16 transactions EUR 26 mln
TFP TFP –– Canadian Beneficiaries Canadian Beneficiaries -- Examples Examples Bombardier Aircraft
Emery International Developments, Inc.
SR Telecom Inc.
International Grain Trade
Hamtrade International Inc
Greenvalley Equipment, Inc
GN Plastics Company
Transactions covered for Canadian ExportersTransactions covered for Canadian Exporters
ExamplesAircraft to RussiaTelecommunication equipment to MacedoniaAgricultural equipment to RussiaIndustrial production equipment to RussiaShipbuilding equipment to UkraineSteel production equipment to UkraineMeat and grain to MacedoniaVegetables to Romania
TFP TFP -- Supporting SMEs (1999 Supporting SMEs (1999 –– 2003)2003)
54% of all transactions are below EUR 100,000
1203
779
19530
0
200
400
600
800
1000
1200
1400
Number of Transactions
<100,000 100,000to 1 mln
1 - 5 mln > 5 mln
Amount in EURs
Confirming BanksConfirming Banks
Confirming Banks in CanadaConfirming Banks in Canada
• Bank of Montreal
• Canadian Imperial Bank of Commerce
• HSBC Bank Canada
• National Bank of Canada
• Scotiabank
• Societe Generale Canada
• TD Bank Financial Group
Confirming Banks in Canada by No. of TransactionsConfirming Banks in Canada by No. of Transactions
Canadian Imperial Bank of Commerce - 7
TD Bank Financial Group - 2
Societe Generale Canada - 2
Others – 5
31%
56%
0% 0%
13%
0%
10%
20%
30%
40%
50%
60%
5 4 3 2 1
TFP Users TFP Users -- Client Satisfaction with EBRDClient Satisfaction with EBRD
Average – 4.2
Q. Using a 5- point scale from 1 'poor' to 5 'excellent', how would you rate your overall satisfaction with the products and services delivered by EBRD?
Achievements Achievements –– Client SatisfactionClient Satisfaction
Readers of Trade Finance magazine have voted the EBRD the Best Development Bank in Trade in 2003 and 2004
EBRD invites other development banks, commercial financial institutions and Export Credit Agencies to co-finance or co- operate with EBRD
TFP TFP -- CoCo--Financing with Confirming BanksFinancing with Confirming Banks
0
5
10
15
20
25
30
35
40
1999 2000 2001 2002 2003 2004
% from total turnover
Rish sharing withConfirming Banks
Risk Risk Sharing (December 2003)Sharing (December 2003)
On average 36%, but varies widely from 0% to 65%
Direct Participation by Confirming Bank (EBRD Guarantee covers less than 100% of the risk)
Direct Participation by Confirming Bank under EBRD Umbrella (A/B Guarantees)
Participation by a third party bank (portfolio sales)
Donor Risk Sharing Guarantee Funds (Balkans and other countries)
TFP TFP –– Donor & TC FundsDonor & TC FundsDonors support the TFP through contributions to
Donor Risk Sharing Funds, sharing EBRD’s risk in South East Europe and Central Asia (including funds of Switzerland, Germany, Netherlands, Norway and Austria)
Training of trade finance staff of banks in EBRD’s Countries of Operation (funds provided so far by Ireland, UK, France and Austria for training of 300 bankers from 65 banks in 15 countries)
Trade Finance Advisory Services for banks in Russia, Ukraine, Central Asia and Caucasus (funds provided so far by Canada,the Netherlands, Austria and Ireland)
Instruction for Exporters & ImportersInstruction for Exporters & Importers
Check under www.ebrd.com/tfp, for which Issuing Banks and which tenors EBRD may guarantee the payment;
Ask your buyers/suppliers to check if an Issuing Bank under the TFP would be ready to issue the required trade finance instrument;
Ask a Confirming Bank of your choice to confirm the payment instrument under the guarantee of EBRD
ContactsContacts
European Bank for Reconstruction and DevelopmentOne Exchange SquareLondon EC2A 2JNUnited KingdomTel: +44 207 338 6813 (Yelena Tonna)
+44 207 338 6476 (Rebecca Suknenko)Fax: +44 207 338 6119/7029e-mail: [email protected]
www.ebrd.com/tfp
Financial Institutions - Trade Facilitation Programme (TFP)
www.ebrd.com/tfpwww.ebrd.com/tfp
Annual Meeting & Business Forum 2005Annual Meeting & Business Forum 2005
22- 23 May 2005 in BelgradeParallel forum of debate and discussion on the investment climate in the region
Good opportunity to:find out more about the EBRD and its countries of operationsnetwork with bankers, business people and government officials
TFP TFP -- Indicative Tenor List (1)Indicative Tenor List (1)
180Azerigasbank
90BVB2 yearsPriorbank
Belarus
180-360Bank of Baku180-360UniBank (former Mbank)180Azerdemiryolbank2 yearsIBA
Azerbaijan180Agricultural Cooperative Bank of Armenia180Armeconombank180Armimpex Bank180Anelik Bank LLC
Armenia180Banca Italo Albanese180ABA
AlbaniaTenor, daysBankCountry
TFP TFP -- Indicative Tenor List (2)Indicative Tenor List (2)
Kazakhstan2 yearsBank Turan Alem2 yearsHalyk Savings Bank360ATFBank2 yearsKazcommerzbank360Temirbank2 yearsBank Center Credit
Bulgaria3 yearsUBB360Union Commercial Bank
Georgia2 yearsTBC2 yearsBank of Georgia180Tbiluniversal180United Georgian Bank
Bosnia3 yearsRaiffeisen Bank d.d. BiH360UPI Banka d.d.180-360Zagrebacka Banka180Universal Banka
Tenor, daysBankCountry
TFP TFP -- Indicative Tenor List (3)Indicative Tenor List (3)
360Tutunska Banka
Moldova180Victoria Bank180Agroindbank180-360Moldindconbank180-360Mobias Bank
Romania360Banca Comerciala Robank SA
Latvia360Rietumu Banka
Lithuania360AGBank
Macedonia360Komercijalna banka360Stopanska
180Export & Credit Bank
Kyrgyz Rep.180Demir Kyrgyz International Bank180Inexim Bank360Kyrgyz Investment and Credit Bank180JS Commercial Bank Kyrgyzstan
360Banc Post360Banca Transilvania
Tenor, daysBankCountry
TFP TFP -- Indicative Tenor List (4)Indicative Tenor List (4)
360Eksimbanka180Euromarket Banka
360Raiffeisenbank JugoslavijaSerbia & Mont.
360TransCapitalBank
360HVB Jugoslavija
360Absolut Bank2 yearsUralsib Bank2 yearsProbusinessbank360Asia-Invest Bank (Russia)360Uraltransbank2 yearsCenter-Invest Bank360Petrocommerce Bank2 yearsChelindbank360KMB-Bank (Small Business Credit Bank)3 yearsIMB360West LB Vostok5 yearsSberbank3 yearsVTB
RussiaTenor, daysBankCountry
TFP TFP -- Indicative Tenor List (5)Indicative Tenor List (5)
Uzbekistan360NBU360UzDaewoo360Asaka
360Ukrsotsbank360ProCredit Bank360Raiffeisen Bank Ukraine360JSC Kredyt Bank3 yearsHVB Ukraine360ING Ukraine180Nadra Bank2 yearsAVAL Bank360Forum Bank360FUIB
Ukraine180Tajprombank
TajikistanTenor, daysBankCountry