€50 million finance line to facilitate foreign trade
The European Bank for Reconstruction and Development (EBRD) is stepping up its support for Cypriot exporters and importers with a €50 million trade facility to Bank of Cyprus (BoC) under the EBRD’s Trade Facilitation Programme (TFP). Bank of Cyprus will become the second issuing bank in Cyprus under the programme.
Through the facility the EBRD will issue guarantees in favour of international commercial banks covering the political and commercial payment risk of the transactions undertaken by Bank of Cyprus (BoC). In addition, Bank of Cyprus will also benefit from the EBRD’s award-winning technical cooperation projects in trade finance.
Lucyna Stańczak-Wuczyńska, EBRD Director, Financial Institutions, said: “This is a very important step to widen and deepen our engagement in Cyprus. The EBRD will boost intra-regional trade and will contribute to the development of trade links between Cyprus and other countries where we invest. Extending trade is an important way of strengthening the local economy by creating opportunities for growth and job creation.”
Libor Krkoška, EBRD’s Head of Office in Cyprus, said: “We are very happy to welcome Bank of Cyprus, the leading commercial banking group in Cyprus, as a participant in the EBRD’s Trade Facilitation Programme. This agreement will allow BoC to expand its corresponding bank network and stimulate working relationships with countries where the EBRD invests. We look forward to working with BoC to support Cyprus’s exporters and importers.”
The EBRD Trade Facilitation Programme will be particularly useful for financing exports of construction and engineering services to the Middle East and other Mediterranean countries, including risk cover for bid and performance bonds and funding of short-term pre-export finance loans.
John Hourican, CEO of Bank of Cyprus, added: “As a participant in the EBRD’s Trade Facilitation Programme we aim to enlarge our support for Cypriot small and medium-sized enterprises as well as exporters and importers through the extended correspondent bank network that the programme offers for transactions in the Middle East and other countries where the EBRD invests. With this step BoC will contribute to the development of trade between Cyprus and other countries, which will strengthen the local economy by increasing exports and creating opportunities for growth and new jobs.”
Founded in 1899 and based in Nicosia, Bank of Cyprus is the largest and leading financial institution on the island with a well-established nationwide branch network and significant market shares across all business. In 2014, the EBRD acquired a 5 per cent equity stake in BoC.
Launched in 1999, the TFP aims to promote foreign trade to, from and among the countries in which the EBRD invests. Through the programme, the EBRD provides guarantees to international confirming banks and short-term loans to selected banks and factoring companies for on-lending to local exporters, importers and distributors. The TFP currently includes over 120 partner banks in 25 countries where the Bank invests, with limits exceeding €1.5 billion in total, and more than 800 confirming banks worldwide.
Since the beginning of its operations in Cyprus in December 2014, the EBRD has invested over €150 million including trade finance lines.