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EBRD to lend US$ 30 million to Vneshtorgbank
Deal is part of a rapidly expanding programme to boost foreign trade
The European Bank for Reconstruction and Development (EBRD) is lending US$ 30 million to Russia’s Vneshtorgbank under a fast-growing programme that makes financing of foreign trade more cost-efficient. The revolving credit will enable Vneshtorgbank to refinance the pre-export loans it makes to private Russian companies. Vneshtorgbank becomes the first bank in Russia to participate in this new element of the EBRD’s Trade Facilitation Programme, which recently celebrated its first anniversary and topped US$ 200 million in volume.
Loan documents were signed in London today by Jean Lemierre, President of the EBRD, and Yuri Ponomarev, Chairman of Vneshtorgbank.
"Vneshtorgbank is one of the two largest banks in Russia and plays an important role in the financing of the country’s foreign trade and manufacturing industries," Mr Lemierre said. "It was the first Russian bank after the 1998 crisis to participate in our Trade Facilitation Programme, and remains the most active Russian user of the programme’s guarantee facility. Now Vneshtorgbank is the first Russian bank to take advantage of the second component of the programme – the Pre-export Finance Facility. This is not only good for Vneshtorgbank – it is good for all the Russian companies that will now find it easier to sell their goods abroad."
According to Mr Ponomarev, Chairman & CEO of Vneshtorgbank, the EBRD has become the most important foreign banking counterparty of Vneshtorgbank and there exists a good potential for further cooperation both in Russia and elsewhere.
The total amount earmarked by the EBRD for Vneshtorgbank under both components of the Trade Facilitation Programme is now US$ 50 million, although Mr Lemierre noted that more may be allotted depending on the demand from Russian companies.
The new Regional Trade Facilitation Programme took effect in June 1999. Its two main components are the Guarantee Facility, which allows accredited banks to use EBRD guarantees to obtain confirmation of their trade finance instruments by foreign banks, and the Pre-export Finance Facility, which helps banks fund the growth in their portfolios of loans to the local industries. Since the programme’s inception, 240 transactions totalling €277 million have been completed – including
33 transactions worth €35 million in Russia. To date, 42 banks from the EBRD’s countries of operations have signed Guarantee Agreements with the EBRD, while 125 international confirming banks in 49 countries have also joined, providing worldwide coverage.
The EBRD and Vneshtorgbank also signed a memorandum to extend their cooperation and develop new projects in 2001. The memorandum confirms the interest of both institutions to co-operate in providing medium-term finance to Russian industrial companies, as well as Vneshtorgbank’s involvement in financing medium-sized and smaller businesses.
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