Sumitomo Mitsui Banking Corporation and EBRD deepen cooperation

By Axel  Reiserer

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Framework agreement signed under Trade Facilitation Programme 

Sumitomo Mitsui Banking Corporation (SMBC), one of the largest banks in Japan, has signed a framework agreement with the EBRD that allows SMBC to participate with a new product in the EBRD Trade Facilitation Programme (TFP).

According to the agreement, SMBC will be able to make A/B structured participations in syndicated guarantees issued in favour of confirming banks. SMBC will take on a “B portion”, sharing the risk of the underlying trade finance transaction with the EBRD. This will enable SMBC to increase its trade finance capacity in economies where the EBRD invests.

The signing of the framework between SMBC and the EBRD will strengthen the cooperation between the two institutions and primarily focus on promoting green transactions under the EBRD’s Green TFP. The award-winning programme supports countries of the EBRD regions in building low-carbon and climate-resilient economies.

The Green TFP finances and supports the introduction and use of green technologies, which often need to be imported into the EBRD regions. To date, the EBRD has supported more than €425 million in green trade financing. Almost 600 Green TFP transactions have been financed in 15 economies where the EBRD invests, resulting in annual energy savings of 733,130 MWh, cumulative water savings of 1,618,025 m3 and emission reductions totalling 310,728 tonnes of CO2 equivalent.

The EBRD TFP was developed to promote and facilitate international trade to, from and within central Europe and the Baltic states, eastern Europe and the Caucasus, south-eastern Europe and the southern and eastern Mediterranean region. Under the TFP, guarantees are provided to international commercial banks (confirming banks) thereby covering the political and commercial payment risk of transactions undertaken by issuing banks in the EBRD regions.

SMBC is a global financial group that develops operations in a wide range of fields including banking, leasing, securities, credit cards and consumer finance.

SMBC is comprised of four business units: a Retail Business Unit, Wholesale Business Unit, International Business Unit and Global Markets Business Unit. With this structure, SMBC have developed a framework for drafting and implementing strategies based on customer segments that spread beyond the boundaries of major subsidiaries and affiliates.

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