The European Bank for Reconstruction and Development (EBRD) is supporting the expansion of international trade in Cyprus with a €20 million trade facility to Eurobank Cyprus Limited under the EBRD’s Trade Facilitation Programme (TFP). Eurobank will become the first issuing bank under the programme in Cyprus.
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 Eurobank. In addition, Eurobank 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 aim to contribute to 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 the EBRD would like to be more engaged in working with Cypriot banks.”
Michalis Louis, CEO of Eurobank Cyprus Limited, added: “We are particularly pleased and honoured to sign this agreement with the EBRD today. This facility will enable and assist our clients operationally and in a cost-efficient manner to promote their export/import businesses. At the same time, it is a vote of confidence for the Cyprus economy and our bank by a major and very well-respected international institution. We are looking forward to expand our cooperation with the EBRD in other areas of mutual interest.”
The signing took place in the framework of the EBRD’s first Information Session dedicated to “Financing Foreign Trade with Cyprus” today, which attracted up to 100 representatives from issuing and confirming banks under the programme; the International Chamber of Commerce, Vienna; the World Trade Organization, as well as key trade finance professionals to discuss industry challenges with leading specialists including regulators and economists.
The main topics of discussion were the latest trends and developments of trade finance in the region including factoring and supply-chain finance. With the exception of a few countries, the factoring business remains largely under-developed or non-existent in the EBRD regions. Leading specialists from factoring companies and organisations including International Factors Group and International Trade and Forfeiting Association discussed the development of this product in the EBRD region and ways to provide companies with wider access to this source of financing.
Presentations by Marios Tsiakkis, Honorary Secretary General of the Cyprus Chamber of Commerce and Industry (CCCI) and Vincent O’Brien from the International Chamber of Commerce (ICC) provided an update on trade and trade finance activities as well as the latest trends and challenges in the industry, with a comprehensive outlook for the rest of year. Representatives of some of the most active confirming banks under the TFP: Commerzbank, Germany; and Deutsche Bank, Germany; discussed the opportunities available and their view of trade finance development in Cyprus.
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.